The crisis that erupted in Europe in 2008 has had an impact on Europe, which has lost a significant source of demand for its products, realizing that its own banks are facing disaster. In fact, transactions in Europe were much worse given that WallStreet had a leverage ratio of 1 to 35, while European banks had a leverage ratio of 1 to 55.
This has resulted in the decline of GDP in the strongest western European economies, while Greece has been in recession since 2008 due to the domestic economic policy.
The ECB, the European Commission and the Member States, in order to deal with the crisis, have acted in a similar way to what the US government has done, that is, they have the losses of the banks in public debt.
The main difference from the EU is that Europe does not have an internal surplus recycling mechanism such as a federal budget, so that it can transport accumulated monopoly profits from one country (such as Germany) to another. .
In this way, it is clear that at this difficult economic time, the rescue of the euro area central banks has been given priority and a single rescue mechanism for the Member States has not been strengthened, but instead the responsibility for the financial problems of the rest of the world.
At the same time, the banks' management, which was not facing any major problems, decided to invest a percentage of the ECB's public money through insurance contracts, believing that the Bankruptcy for the fact that participation in the eurozone does not allow the most indebted countries to devalue their currencies.
The higher the volume of transactions with the CDs, the more acute the price increase for a possible bankruptcy of Greece or Ireland, first of all the The two countries are being driven more and more to the point of substantial bankruptcy and, to a lesser extent, to the unavailable funds available to businesses that want to invest in productive activities but also to the state where they are trying.
With a few CDs it is nothing more than a bet that anyone (individual, business or country) will be able to meet their obligations.
The European bank rescue plan has given the financial system the opportunity to generate private money again. The banks that bought these bets in October and November 2009 made huge profits while the money generated was not leaked and was doomed to lead to a new crisis.
The problems in the Greek economy that came to the fore due to the global crisis in turn highlighted the deeper problem of the eurozone - that is, that it is a series of countries that have a common currency, but can not really be done reason for real monetary union.
Ιn this way, from the end of the last decade, a final end was entered into a period of operation of the euro during which no distinctions were made between the countries of the euro area, as the countries with the largest deficits and public debt were considered insolvent and began have limited access to markets.
Book:P. Ioakeimidis 'Greece in European Union'