A week ago, an agreement to address Greece’s debt problems seemed close at hand. Last week, in a dramatic display of socio-economic instability, several Greek government cabinet members resigned, labor unions pursued a nationwide strike and its citizens rioted in the streets. Eurozone leaders are increasingly concerned that the Greek government cannot deliver the changes required in order to provide additional funding and debt restructuring. German Finance Minister Wolfgang Schaeuble said, “the promises from Greece aren't enough for us anymore" and "with a new austerity program they are going to first have to implement parts of the old program and save”. At the same time, Greek citizens are losing faith in both their government and Eurozone leaders as their living standards collapse (Note: unemployment is over 20%).
While many participants in this tragedy had hope for a resolution to the Greek mess, the magnitude of the problem, the number of financial moving pieces and the decreasing level of trust among the various players (which was never high to begin with) may be too great to overcome. Note that while there is no shortage of finger-pointing at the moment, this problem started before Greece’s entry into the Eurozone (June 2000); when corrupt Greek politicians, who colluded with investment bankers, misrepresented the country's financial viability and naive Eurozone leaders, eager to expand their franchise, approved Greece’s Eurozone membership.