While the debt crisis in Greece is a relatively new issue facing the ancient country, what really caused it can be traced back to its industrialization and the World wars. Greece became industrialized around the start of the 20th century due to World War One. World War One would lead to World War Two, in which the government would start a loan program with its citizens that it would never be able to pay back due to that very war. During this time Greece had hyper inflation and famine which decreased population by 7%. Greece would raise itself out of debt in the middle of the 20th century, but due to poor fiscal polices in the 80s, debt would raise once again. This was only temporary and Greece would pull itself out of debt once again until 2009 when it would once again fall into recession where it lays to this day.
Industrialization led to the world wars, and in many ways to the problems Greece is having today with the European Union. It was a steady economic decline that started in 2009 that would cause Greece’s credit rating to fall to record lows and cause unemployment, pension freezing, and riots throughout much of the country. Greece’s government would collapse due to not being able to elect a president, and differences in opinion on the EU bailout of the country. As of now the loan to Greece has been extended by four months, but this has not stopped Greece’s threats towards the European union. These threats have been varied, but the two most notable can be found in an article by the BBC World-service. The first was to “flood Germany with illegal immigrants and seize private property”. This threat was made over a dispute the two countries had over reparations for World War 2. While this threat did not seem to work too well, this new threat could have the European Union up in arms. Greece has had meetings with Russia, which is a direct competitor to the EU. The Eu and Russia have been having many struggles against one another, but the biggest has been the Ukraine Crisis. These meetings were a way of showing the EU that Greece has options, and if they do not cut them some slack, they could always go to the EU’s direct competitor.
Though this is happening on the other side of the planet, this matters to even us here in America. Russia and our country have been at odds with each other since right after World War Two, and what would be good for one nation could be bad for the other in their position in global politics. This is a complicated issue, and although it may seem like a few nations throwing empty threats at each other, there is much more at stake then just one nation. Europe has many of our closest allies on the planet and what is hurtful to the EU, could be terrifying for the USA.