Greece : A Common Euro Zone

1486 Words Apr 1st, 2015 6 Pages
In 1992 the Maastricht Treaty was developed by the European Union and signed by 12 member nations to create a common Euro Zone. This Euro zone uses a single currency called the Euro, in hopes that this currency will make transactions across all member nations’ trade and exchange easier. However, no one could have imagined how big of an impact the down fall of a nation’s deficit could have on the Euro Zone, until Greece signed the Maastricht treaty in 2002. When the Greek government came on to the Euro Zone, Greece’s budget deficit and spending habits came along with it too. In order to join the Euro zone, Greece prevented the Euro zone countries from knowing its true budget deficit, inflation, interest rates, and other monetary requirements on the Maastricht Treaty (Eichler, 2011). According the Huffington Post, Greece’s debt as a percentage of GDP amounted to 165%. This deficit is higher than Portugal, Ireland, Italy, and Spain; countries second to Greece in terms of budget deficits. By hiding this true debt percentage from the Euro zone, Greece ended up dragging the Euro and its neighboring country’s economy down due to spending habits. The Greek government’s spending habit is extreme. Even when the European Union leaders put out a stimulus plan to help reduce Greece’s budget deficit in December of 2009, the Greek government continues to spend and fail to take austerity measures to cut spending. The amount of stimulus plans proposed by the European Union to help offset…
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