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Crunch Time: A Simple Guide to Understanding The Greek Financial Crisis

July 4, 2015

For those of us who are not world class economists, the current Euro crisis can be a (tiny) bit confusing. From people rioting on the streets, to banks shutting down, and the Greek Prime Minister calling for a referendum on a question that no one really understands; everything is happening so fast that it has become almost impossible to keep up. Back to the Start In order to understand what is happening right now in Greece, it’s crucial to take a few steps back in time and understand the situation within the larger context of the Eurozone’s history. The Euro was adopted as a common currency in 1999 by 11 countries. Today a total of 19 European countries use the euro as their national currency. Collectively, all these countries are part of a monetary union referred to as the Eurozone or Euro area. Such a union makes trading, borrowing and doing business across borders much easier. Moreover, because of these very same advantages, it makes its members extremely economically interdependent, which can be very dangerous at times of crisis. Greece and the Eurozone Greece joined the union in 2001 after…

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