German Chancellor Angela Merkelâ€™s diplomatic/economic victory in blocking and undermining an automatic bailout for the Greek troubled economy; clearly it is good news for the shaky and unstable eurozone in a short term. Greece for decades has overspent and has a very corrupt political/economic system.
Athens throughout the years has proved again and again how inept is to clean house and modernize her socio-economic political system.
Whatever happens to the Greek damaged economy is unclear; the crisis clearly reveals one major and serious problem with the euro. It is a political driven project created and established by politicians with very little regard for economic prosperity or stability. Euro’s role was to create the image of an artificially united Europe. In addition, it is based on the German mark, thus Berlin believes that the European Union is a German feudal state.
The euro’s shortcomings during the economic bust are very clear; it locks the member states of the eurozone into a price system across the European continent and creates the conditions for serious economic instability. It is equal significant is that for a short term the euro created an economic paradise, however it was short lived. The European Union is not a federal system like the American system. Therefore, it has not the capabilities to avoid or defeat economic crises similar to the American abilities.
In addition, the European Central Bank set low interest rates to stimulate the very sluggish economies of Germany and France caused the peripheral economies of Spain, Portugal, and Ireland to overheat. Hence, it was a serious economic mistake for the European economists to adopt that kind of detrimental financial and fiscal policies.