US frustrated with Eurozone’s handling of Greek debt crisis

Story by The Takeaway. Listen to audio for full report.

Two of Europe’s biggest economies, Germany and France recently said that they weren’t giving up on Greece. US Treasury Secretary Timothy Geithner expressed confidence that Europe could “hold this thing together,” but he made it very clear that the current debt problems are Europe’s to solve.

The fact is, “Greece is in a mess,” the BBC’s Steve Evans told PRI’s The Takeaway. “Its public finances are in a mess.”

Since Greece is in the Eurozone, many believe its failure to pay its debts will have dire consequences for entire economic union, Evans added.

If Greece drops out, then Italy could drop out of the Eurozone, too. And the banks that lent money to Greece could be in serious trouble.

“The fear is that everyone will then start thinking, hold on a minute, we don’t quite know where the bad debt is in the banks, therefore we don’t trust the banks,” Evans warns, “therefore we pull our money out of banks.” And then it all begins to feel like the height of the recent financial crisis.

A major concern, says Evans, is that Greece’s problems will, “cascade around Europe and then cascade across the Atlantic in a very uncontrollable, very unpleasant fashion.”

Experts across Europe have been talking about alternative policies to backing Greek debt, but Germany and France have made it clear that they’re sticking behind Greece.

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“The Takeaway” is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what’s ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH.