What about after Greece?

The debt crisis of Greece, which has been on agenda for a long time now, brought about many questions. The structure of European Union, first intervention by IMF and political crisis in the Union and splits in opinion began to cause many details that can cause new problems to emerge in the long run to go unnoticed. In fact these details which came to agenda include some points that can cause serious problems in the future which must not be missed in a period when monetary organizations planned with taking Greece in its focus are intense. Why?
1)While people are racking their brains for Greece, Ireland, Portugal, Italy, Spain and Iceland are faced with serious debt burdens. Portugal’s debt burden for the last quarter of the past year was 548 billion dollars. In addition, according to the last quarter total debt burdens declared by World Bank last year, Spain’s debt is 2.546 billion dollars, whereas Ireland’s debt is 2.321 billion dollars. In the midst of these debates, the debt burden of Greece, which is in grave need for IMF and European Union assistance, is 582 billion dollars. Iceland’s debt is approximately 136 billion dollars. Here one question comes to the minds. What if the economic problems that Spain and Italy have been struggling with so long break out and they become unable to pay so heavy debts? More importantly, in an environment when no one really knows whether the 45 billion dollars planned for Greece under the leadership of Germany will ensure at least relative stability for Greek economy, what will happen to Spain and Italy, which suffer from heavy debt burdens, get into crisis, which would not be a surprise at all? If such intense discussions are being held for Greece, the results of economic deadlocks that can be experienced in larger countries enables us to think about the future of European Union as well.
2)We can mention budget deficits as the second reason. When we look at the picture generally, we can claim the following based on the data that we possess. Last year budget deficit of Ireland was 14,3% of its GDP (23 billion Euros), whereas the deficit expected this year is 14,7%. Budget deficit in Greece quadrupled the 3% level, which is accepted as European Union limits, and became 13,6 of GDP (32,3 billion Euros) whereas this year the ratio is expected to decrease to 12%. Italy’s debt is 5,3% of its GDP (80,3 billion Euros), which is closer to EU’s requirements, and indicators of conducted analysis show that this year the ration will probably remain unchanged. Finally the budget deficits of Spain, Portugal and Iceland are 11,2 % (117,6 billion Euros), 9,4% (15 billion Euros) and 11,9% (1,09 billion Euros) of its GDP, respectively. Expectations for this year are 10.1%, 8% and 8.5% for these countries respectively. Generally viewed, there is a common opinion that the values expected for this year will go downwards, but the visible clear picture is that they are still very far from the EU’s budget limit reference point, which is 3 percent. We must not forget the possibility that these expectations, which were put forward during economic crisis periods, can begin to increase again with a small wave of shocks in global system. In this environment in which the economic problems Greece is suffering from have caused serious value-loss for Euro, one can easily forces the consequences that can arise from the smallest problems cause by other countries with serious budget deficits and huge debt burdens. But as far as we follow, at what stage are the plans directed to this? Actually the question is wrong; it should be “are there any such plans!!!”
3)Finally, the unemployment problem, which is seen as the major reason for the inability of markets to recover continues naturally under the same negativities, as in debt burden and budget deficit. According to February 2010 reports of OECD, Spain holds the record with 19%, followed by Ireland with 13.2% and Portugal by 10.3%. The unemployment rate of Greece, which is accused of having the biggest pile of problems in EU, has 10.2% unemployment rate. Iceland has the smallest figure with 7.8 percent. Naturally as long as the vacant seats of workforce in goods and services market, which is accepted as the major actor of economy, continues to exist, it will be inevitable that the lack of demand caused by unemployment becomes even worse in a potential economic deadlock that can occur. In a news in the media recently, German state said “we are working, you should work, too”, which is an expression of its unwillingness to give loans to Greece, makes us wonder how this will be possible under such debt burden, budget deficit and unemployment.