Reference no: EM132974124

This feature explores the causes of the 2010 financial crisis in Greece and its implications for other countries in the Euro Zone. Years of overspending by the Greek government led to huge deficits that the country could not manage. While the country's problems had been hidden throughout much of the decade, a new government that took power in 2009 revealed that Greece's problems were actually worse than had been suspected. Investors lost faith in Greece and its ability to not only refinance its debt but also to implement policies to reduce its debt load. This combined with concerns that other countries in the euro zone could have problems sent the euro to its lowest level in years. Discussion of this feature can begin with the following questions.

Discussion Questions

1. Discuss the implications of the financial crisis in Greece on other countries in the euro zone. What does the loss of confidence in Greece and in Spain, Portugal, and Italy as well mean for the bloc?

2. What does a falling euro mean for U.S. companies exporting to the European Union and for U.S. companies with operations in the bloc?