The Eurozone is a unique economic system made up of 17 nations with separate goals and different economies; allowing each country to issue its own bonds. Despite their differences, most of these countries are bound together by the Euro and the European Central Bank (ECB) since January 1st, 1999. Regardless of these efforts, Eurozone nations have developed their own unique crises, and having a single currency has not allowed the countries to address their issues effectively. Because of the differences among Eurozone nations and the problems that the Euro presents, this situation will not end without significant changes - and a complete breakup of the Eurozone is a distinct possibility.
If the Eurozone falls apart, Greece financial issues will have much to do with it. According to Standard & Poor's chief investment strategist Sam Stovall: "most people on Wall Street believe Greece will eventually default."" Greece has been spending irresponsibly for the past 15 years, creating a debt of over 150% of its GDP of $318.7 billion. Greece is in a bind, as it's accepted a payment of $145 billion from the ECB over five years on the basis that it also reduces its spending and increases taxes. .
One issue is that these imposed tax increases will not give Greece enough revenue to pay for its public services, putting government workers at risk of not being paid and social security beneficiaries from receiving aid. Another problem is that Greece needs government spending to aid failing industries and to address unemployment, which has steadily risen to 17.6 percent as of July 2011. Most importantly, the $145 billion being lent to Greece will mainly be put towards repaying other creditors. This puts Greece in a vicious cycle, as the economy will likely continue to fail without government stimulation, and using borrowed money to pay back other debt is a method that will delay, but not stop, a default, unless Greece finds a very quick solution to generating more revenue which is unlikely.
