Bust: Greece, the Euro and the Sovereign Debt Crisis

ISBN: 047097611X

Author: Lynn, Matthew

Condition: New

In 2001, Greece saw its application for membership into the Eurozone accepted, and the country sat down to the greatest free lunch in economic history. However, the coming years of global economic prosperity would lead to unrestrained spending, cheap borrowing, and a failure to implement financial reform, leaving the country massively exposed to a financial crisis-which duly struck.In Bust: Greece, the Euro, and the Sovereign Debt Crisis, Bloomberg columnist Matthew Lynn explores Greece's spectacular rise and fall from grace and the global repercussions of its financial disaster. Page by page, he provides a thrilling account of the Greek financial crisis, drawing out its origins, how it escalated, and its implications for a fragile global economy. Along the way, Lynn looks at how the Greek contagion has spread like wildfire throughout Europe and explores how government ineptitude as well as financial speculators compounded the problem.Blending financial history, politics, and current affairs, Lynn skillfully tells the story of how one nation rode the wave of economic prosperity and brought a continent, a currency, and, potentially, the global financial system to its knees. Lively, engaging, and thought provoking, Bust reminds us just how interconnected the world really is.Q&A with Author Matthew LynnAuthor Matthew Lynn Bust looks at how the sovereign debt crisis started in Greece, but why did it start there?Greece was one of the most profligate nations in the world. It has been virtually continually in default on its debts in one form or another ever since the modern Greek state was created in the nineteenth century. So it was always a fairly good candidate.At the start of 2010, the markets were already getting worried about sovereign debt. It was essentially Act II of the credit crunch. Governments all around the world had fixed a private debt crisis by turning it into a public debt crisis: they ran up these huge deficits, both to bail out their banking systems and to boost their economies. But the public debts were never any more sustainable than the private debts.Greece happened to be the easiest country to make an example of. But if it hadnt been Greece, it would have been someone else.This was really a crisis about the markets refusing to sanction unending government deficits - and thats what the book explores. But the book implies this is a story about the euro as well? Why is that?It certainly is. The sovereign debt crisis blew apart the euro, and it is going to be very hard to put it back together. Europes single currency celebrated its first decade of existence in pretty good shape. The currency was stable, new members were joining, and it was gaining ground on the dollar as the worlds most important currency.But then the Greeks came along and put a bomb underneath it.Greece lied and cheated its way into the euro. It completely made up the figures that squeezed it into the euro, and, once it was inside, made no attempt to play by the rules. When confidence in the country collapsed, they expected the rest of Europe to bail them out. But what kind of club is it where you can cheat your way in, ignore the rules, then expect the other members to pick up your bar bills? Not one that anyone is going to want to belong to for long.So this is not just a story about the sovereign debt crisis - it is a story about how the euro is falling apart, and how that will change the European Union as well. What did you learn from writing the book?The book was a real education for me. That was one of the reasons I wrote it. I wanted to learn more about how this fairly small country right on the edge of Europe which no one usually paid very much attention to was suddenly right at the epicentre of a major financial crisis.Its not the kind of story you can make sense of just by reading a few headlines. There were so many strands that had to be pulled together. The history of Greece, and why its economy was so underdevelope