Is Europe dead?
Has the post-war dream of a grand union of democratic states been shattered beyond repair? North American observers might be forgiven for thinking so, given the unprecedented tidal wave of public recriminations, personal insults, and dire predictions spewing forth from the European Union’s panicky and divided leaders.
The principal cause is the imminent climax to the crisis over Greece’s undeclared, de facto bankruptcy. The country is €323 billion ($352.7 billion) in debt — more than 175% of its GDP. It cannot pay what it owes to other European countries and the European Central Bank. Its next big loan repayment, of €1.6bn to the International Monetary Fund, falls due at the end of this month, and may be missed.
The left-wing Syriza government, led by Alexis Tsipras, has confirmed Greece will run out of money by June 30 unless creditors release an additional €7.2 billion in bail-out funds. Yannis Stournaras, Greece’s central bank governor, warned that failure to reach a deal would “mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and — most likely — from the European Union.”
If Greece is expelled or otherwise forced to drop out of the eurozone — the group of 19 countries which have adopted the euro as their common currency — the consequences could be catastrophic and far-reaching. For Greeks, it could trigger bank collapses, emergency controls on capital flight, non-payment of salaries, and broad social and economic chaos. For the EU, it could spell the end for the euro if market confidence fails and other severely indebted states decide they, too, can’t or won’t pay up. (Read more from “Is Europe Dead?” HERE)
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