Skip to main content

Posts

Showing posts from May, 2010

A bailout for now, but troubles ahead

After several months of haggling, euro zone countries finally agreed last week on an aid package to help Greece meet its crippling debt and deficit burden. The bailout comprises of USD 145 billion provided by loans, over a three year period, from the International Monetary Fund and European Union member states. More recently, on the 10th May, the EU approved a second USD 980 billion aid package towards rescuing the euro, which had over the weeks come under a bear hammering. The package will also service other debt-ridden countries within the euro zone. The markets exhaled a sigh of relief. Volatility in the markets has been a consequence of doubt concerning Greece and the possibility of a sovereign debt default. This note will seek to explain the circumstances leading to the current crisis and subsequently argue that the euro, as a currency unit, may find it progressively hard to survive, despite the commendable rescue initiatives undertaken by member states of the European Union.