Amidst the reckless fiscal behavior of not only Greece, but also other countries, the future of the euro, whose viability is now being tested, appears to be bleak.

The global financial crisis that originated with the collapse of several US investment banks in 2008 got to do with the European Union's common currency area. Although there is no direct linkage, the same kind of risky borrowing practices that triggered the former crisis, are also at the core of the debt crisis in Greece. Virtually, all European nations are facing a terrible debt and deficit problem. The situation is crucial indeed for the euro and Europe because there are no collective structures to deal with. It could spell disaster not only for the continent, but also for the rest of the world. Europe is entering into a serious unprepared economic crisis and the nascent global recovery could easily collapse going by unsustainable government in weaker countries.

When the euro was created in 1999, proponents claimed that it would narrow the economic differences between member countries of the monetary union. They thought that unemployment rates would converge as would other macroeconomic variables like fiscal deficits, government debt, unit labor costs and productivity. After the euro's first decade, however, there was increased divergence rather than rapid convergence. The difference between member countries have become larger during the euro's first decade. This has become the norm in eurozone today as tensions on economic policy are causing growing rifts within member countries. Therefore, the euro became the common currency of very wealthy economies like Germany and the Netherlands and poorer countries like Greece and Portugal. These differences have become a complicated issue for the newly formed European Central Bank (ECB) as it has to determine the desirable interest rate for members; the so-called one-size-fits-all policy. However, the size of each country's fiscal deficit, results from the spending and taxation decisions of its own sovereign government.

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