The Greeks brought back the Trojan Horse

In 2000 the Greeks attempted to join Euro but were turned back by the ECB due to the high debt to GDP ratio. After some discussion with an investment bank, Goldman Sachs, the resilient Greeks were able to hide or repackage the debt to keep it off their balance sheet. They repackaged their debt and metaphorically hid it inside the Trojan Horse and then presented it to the ECB. The ECB graciously accepted the wooden horse, and now virally the debt has escaped and is invading the victimized city of Troy potentially disintegrating the entire Euro as a currency.

Economist article-What are Greek depositors up to and who loses with an exit.

http://www.economist.com/node/21555567

The Greeks may be the Achilles Heel of the Euro

The ECB should allow Greece to exit the Euro and work on securing credit for Spain, Italy and maybe even France. There is little hope among the Greeks. Unemployment is close to 50% for Greeks under 30 and 25% for the entire population.


One reason for the lack of employment is the lack of hope. They may feel that their government is a puppet and the puppet master is the ECB(Germany). Greeks are not accustomed to paying taxes and changing culture will not be an easy task. What makes things worse is the perception that the Germans control the fiscal economy and the taxes are going to Berlin rather than Athens. The perceived taxation without representation will become a major issue the Greeks will grapple with.


Greece represents a small portion of overall European Union GDP and thus its exit is more contagion risk. Greece is more of a pawn on the chess table where Spain and Italy represent the king and queen respectively. Therefore, it’s essential to look ahead and secure Spain and Italy with financial ring fencing.