Response of "Beware of Greeks Bearing Bonds"

Original Article: http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010

The passage that I have found particularly interesting is the author's discussion on how Greeks find it difficult to compliment other Greek's successes. Indeed, by the author's account, it is almost impossible for Greeks to view the success of their fellow men without suspicion of misconduct and bribe. There has been such mistrust among the Greek people that everyone is devoted to the pursuit of self-interest and self-interest only. This relates later to the infamous Vantopaidi scandal. The public criticism is highly concentrated on the group of monks who have manipulated the Greek government to obtain wealth because, as the author put it, "some outside party...comes in and exploits and corruption of their system. Enter the monks." Given such a high emphasis on self-interest by a nation, it can be expected that even the seemingly holiest group intends to squeeze wealth with deceptive scheme. Further, with a nation that has such inclination to doubt and  reproach others and detect no fault with themselves, it comes as no surprise that the country will lay blames on a single group of monks without reservations. This cultural traits of the Greek nation has somehow explained the scandal from the roots.

Although the Greek economy is nothing but small compare to the other European Union countries, crisis in Greek is expected to threatens the whole Euro Zone. Sharing currency, the Euro Zone is more mutually integrated than any other countries in the world. If Greek defaults, which naturally dampen investors' confidence in the European economy, foreign investors will withdraw their investment in Europe and domestic investors will move their assets abroad to preserve their wealth's value. As a consequence, the aggregate demand for Euro will decrease, and a weaker currency will negatively influence all countries in which the currency is in circulation.

The National Income is consisted of consumption, investment, government expenditure and net export. As the Greek government cut government spending, the National Income will decrease rather than increase. Further, an increase in taxes will reduce Greek household's income, which in turn decrease consumption. Thus, the measure in fact will do no good in bringing up the country's GDP.