Greek crisis wake-up call for eurozone
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When eurozone finance ministers pressed the button on Sunday to activate an unprecedented rescue package for Greece, they may give the debt-ridden Southern European nation some more room for breath.
While it remains unclear whether the 110-billion-euro (146 billion U.S. dollars) package could help to end the six-month Greek crisis, a deeper question looms large over the future of the 16-nation eurozone as a whole.
No doubt Greece is primarily responsible for its own mess, but the crisis has also exposed serious institutional flaws of the eurozone, which was established more than a decade ago.
For years, Athens had run high deficits which sowed the seeds for the current crisis, but the Brussels-based European Commission (EC) has been turning a blind eye to it.
That was partly because the Greek government managed to conceal those bad news from Brussels with statistical tricks. But lacking audit power also limits the EC's ablility to double-check the facts.
Even if the commission had caught Greece breaching the European Union (EU)'s fiscal disciplines, it would have very limited options to force Athens to come to the terms.
The EU's Stability and Growth Pact is probably the only weapon at hand, under which eurozone countries should keep their budgetary deficits below 3 percent of gross domestic product (GDP) and public debts below 60 percent of the GDP, but all the EC could do is to send warnings and provide recommendations.
Although in theory any eurozone member may face penalty if continuously breaching EU rules, no one has ever been punished for that.
Still, analysts say the EC could have done a better job before and after the Greek crisis.
Greece now has a staggering deficit that accounts for 13.6 percent of its GDP and a debt level of nearly 120 percent of the GDP. Obviously, the figures did not come overnight.
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