What really went wrong with Greece!!!....
Greece has been living beyond its means for more than a decade. The Greek government kept borrowing heavily and was on a spending spree after it adopted the euro. After being bailed out twice the debt-strapped country is going to be bailed out once more by a rescue package by European Commission, the European Central Bank and the International Monetary Fund. Public spending has been on a rise and on the other side the income has big dent due to allover tax evasion.
Many other countries in the Europe have a similar pattern like Greece, where they have huge debts and experienced high rises in the wages. The economic turmoil is making it difficult for the repayment of debts and high wage level in these economies are making them less competitive. Surprisingly the key economies in Europe are having not only very high debts but also a high debt per capita, almost comparable to the United States.
Greece defaulting can lead to a the non repayment of the huge outstanding debt, leading to banks and bondholders making heavy loses. It may even lead to nationalization of Greek banks, due to the need of capital infusion. The worst that can happen is a panic in the investors about failures of other economies in the euro zone.
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