The Greek economy and society as a whole is facing a major crisis. The capitalist system which is based on the need to develop, expand then destruct so that more capital is released to pay for those in power works in cycles.
I am not blaming other countries exclusively for the mess that Greece is in right now but the leaders of the Franco German alliance in 2000 knew very well that the Greek economy was not ready for the Euro yet they insisted (in a hurry to support the then PM Costas Simitis) that Greece should join the Euro zone.
There were no real or hard checks made to ensure that what Greek government officials were stating and the returns they were sending Brussels were correctly prepared and audited, as a result Greece entered the Euro zone in a hurry and at a stage where the economy wasn't ready and there was not, in real terms, real convergence prior to entry!
Foreign banks had no problem lending billions to a Euro zone state which in turn encouraged successive government eager to please the electorate, to borrow more and more.
So we now have a situation where the Greek population is being punished for huge government mistakes. 30% of all public sector workers have or will be fired and even pensions have been reduced by 20% vat and other taxes have been increased and there is more to come. There has been one strike after another as the population and the unions there refuse to be punished any further. The austerity measures are imposed to ensure that the banks get paid at some stage in the future but that is at the expense of major poverty for the Greek workers.
The summit this weekend will determine whether Greece will default in which case all hell will break lose or whether the country will continue punishing the people with more austerity measures. If Greece defaults then other countries might do the same and then more banks will collapse...
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