Watching the battle play out between Greece and Europe's financial leadership, observers in the United States might wonder how it is Greece got itself into this mess. Could such a thing ever happen here?...  No, it could not. The reason lies in the different structure of the United States and the European Union, and has led to much confusion in the United States, as politicians have warned that if this or that policy isn't enacted, America could become “Greece on steroids.”  The key difference is that the United States has its own central bank -- the most powerful one in the world. Greece, meanwhile, does not. And while the states of the United States are genuinely united -- a common banking system, common federal budget and common political system -- the eurozone is a federation of countries with a common currency that, in the face of crisis, must largely fend for themselves.

When countries’ economies slow down, they have two sets of tools at their disposal: monetary policy (adjustment of the money supply) and fiscal policy (adjustment of government expenditures). Central banks fill the demand gap of a recession by printing currency, and governments do it by spending more than they save...  A broad array of economists believe this fiscal austerity has devastated Greece’s economy. In the years since Greece implemented its creditors’ austerity policies, its economy has shrunk by almost one-third, and adult unemployment remains above 25 percent.

Greece’s budget tightening would not be as much of a drag on its economy if it had monetary stimulus at its disposal. By devaluing currency, a country can boost its exports and domestic consumer demand. Iceland, for example, was able to recover economically despite a massive fiscal contraction because it had its own currency and could print as much of it as it wanted.

But Greece is on the euro, and the European Central Bank, which controls the euro, has not afforded Greece anywhere near enough stimulus. During much of the recent economic recovery period, the ECB’s cautious monetary policies reflected the inflation concerns of Germany.

Unlike its counterparts in the United States and Great Britain, the ECB raised interest rates twice in 2011, which is believed to have contributed to the continent’s double-dip recession -- and hit struggling economies like Greece’s especially hard.

After the war Germany had its debts written off . So why cant they do this for Greece ? Its Ironic for Merkel to say no to Greece , When her own country was helped . And who put Merkel in Charge ? Because if the truth was only known this EU is just a name the German's are hiding behind to carry on with their world Order , Which everyone thought had stopped after the War . But no , It is still in the pipeline for Germany to be the most powerful country in the Whole world . Uniting Countries and stealing their identities , To make a mega state and Army to stand up to Russia and China . While fleecing every country under her Hitler rule . This needs to stop now . We traded before , And we can carry on Trading under our own Rules . Give these countries there identities back and condemn all the leaders for Treason ... I just hope that members of the Greek Government get to read these comments Wake up for Gods sake, Greece, this is your golden opportunity to go down in history as the country that stood up to the new " banking Nazis " Get back to the drachma - the entire world will be behind you - movements will start almost spontaneously to assist you Vote this dreadful fascist proposal DOWN DOWN DOWN If not Greece will be subject to decades of misery - Do you not realise that the euro is doomed and is being held together by the vested interests mainly germanic interests ??? Why would Eoirpens suffer in order to be part of a currency which will eventually fail

Dear Greeks, take the pain we need some new plates and glasses. WTF. The EU beaurocrats added c£100bn of costs to Euro Countries, have no mandate for their policies, are not accountable and are hugely hypocritical. Let us reduce size of hair dryer and vacuum cleaner motors to reduce emissions whilst continuing to ferry people and documents between Brussels and Strasbourg at a cost in excess of £100m per year, which is of course emissions free.  The amount of money that has been P'd away since the European project started is mind boggling. The accounts have never been signed off since this bunch of loons started, due to fraud and a total lack of control. Imagine being a company in any country in the EC on this basis. No chance; closure and prosecution of the Directors.  This is a monster gravy train for those involved, (Kinnocks spring to mind and several ministers from France and Holland who sit on the CAP committee, but just happen to have huge farming interests, which seemingly they don't have to declare. Doesn't fit with the Companies Acts in the UK).  As a Brit living in France I see several perspectives, but genuinely believe that the future of the UK would be best served by leaving this self-serving gentleman's club. It is an altruistic view of life with no regard to real people and exists to provide a good living to those involved, much of it tax free. Evidenced by the demand for a budget increase for the European Parliament whilst all EU members were cutting costs. How far out of touch can they be. The people need to wake up and recognise that each tier of management/ local and central government carries a cost, London Mayors, etc. and so long as it is accountable then no problem. These people are not accountable to anyone and milk the system to the extreme.

By the time the EU dictators, thieves and liars realise that their European nation destroying project has failed Europe will be in flames and those same EU politicians that created the chaos will be on the run to Argentina…history has a nasty habit of repeating itself.The EU has endangered the real torch bearer of peace in Europe. Most European countries have not meet their obligations to the nato alliance. Instead they send massive amounts of resources to the UnDemocratic EU instead. The German Army is in shambles and the UK has been cutting their capabilities to the bone, and rely on US forces to carry out many of the operations that the UK was self sufficient at a couple of years ago.

"It's very difficult to argue today to your population that it's a well functioning system," Is that the understatement of the year or what?...I would guess that within 2 years not even the Germans will be wanting the Euro, AGAIN.   If Closer union is so good for the EU why is it a complete and dismal failure? All that is happening is that all countries are being brought down to the lowest common denominator of the failed and failing countries as cash transfers from successful taxpaying countries is used to support the lazy unemployable and the massive government structures that are so left wing they eat each other in corruption as they grab what they can for themselves.  No though for tomorrow. They live in a booze and sleep gimmie PC cloud of studied ignorance

European Union officials are bracing themselves for the possibility that Greece’s negotiations with its lenders will not be concluded in time for Athens to receive funding to pay a 3.5-billion-euro bond held by the European Central Bank on August 20, meaning a second bridge loan could be needed.

Greece received an initial loan of 7.16 billion euros last week to meet another maturing bond held by the ECB and repay some 2 billion euros to the International Monetary Fund. It had been hoped that a third bailout could be agreed in time for Greece to receive funding before the next ECB-held bond is due on August 20 but some officials believe that talks may not be completed before the beginning of December. Greece’s total funding needs for August stand at around 5 billion euros as another payment to the IMF is also due next month. A European official who wished to remain anonymous told Kathimerini that the European Financial Stability Mechanism (EFSM) may be tapped again next month – as it was last week – to provide bridge financing to the government until a third bailout has been agreed and approved by Greece’s Parliament, as well as others in the eurozone.

In Brussels, European Affairs Commissioner Pierre Moscovici said on Wednesday he is hoping the bailout deal can be signed by mid-August, while accepting that Greece has to meet a “punishing” schedule. “After months of deadlock, we are now making swift progress on the implementation of the euro summit agreement,” said the commissioner.

No one who understands the EU and how it operates, can understand why people say they would like to stay in it. There is one possible answer which is, the people being asked have no idea what the EU is or what it does. If before a person is allowed to express an opinion they were asked to name the president of the EU Commission or the President of the EU Council or the President of the EU Parliament, maybe that qualifying question would weed out the people with informed opinion from the people who have no idea what the question being asked is all about....The reason why the EU is popular right now, is because everyone can see where a grandstanding negotiation tactic got Greece in the meeting with Juncker. A man you call ridiculous. Frankly, he appears more like a man with no time for non-sense. Whether it comes out of London or Athens he will have no non-sense, and any attempt at hard-line negotiation will lead in a worse deal. The playing field is very asymmetric. Britain has a lot more to lose from no deal than the EU. People are coming to realize that. People feel the bite of austerity. Just imagine how easier it would have been to balance the budgets if the UK had French borrowing costs....I'm curious as to why the EU is supposed to becoming more popular in the UK in the face of continued EZ crisis and failure like the unworkable third Greek bailout, the curse of continuing mass unemployment in the Club Med countries, the growing division in the EZ, the continued isolation of the UK and the total reluctance to negotiate better terms on UK membership. In short the EZ, and with it the EU, is in a bad place which is getting worse. So why is the EU apparently getting more popular in the UK?  The only logical reason the EU can be getting more popular in the UK is that the majority of us enjoy watching the EU tear itself apart whilst our own economy with our own currency is becoming relatively stronger....European elections are a joke. The majority of MEPs are there BECAUSE they support the project of One-Party European governance by the Commission. The 30% that protested were just making a futile gesture. Come on. That is no more a parliament than the Supreme Soviet was. The EU cannot last on that basis. Nor will it reform.

I just wanted to clarify a few things that keep cropping up in some of the commentators’ posts:

The Greek PM explained everything in a TV interview in Greece a couple of days ago: Grexit was never his intention, the referendum aimed at raising awareness of the fact that Europe has a hard nucleus (Germany) and everything else is controlled from there. He hopes for a more balanced Europe in the future (where more lefty parties join in, eg the Spanish Podemos), he said that the negotiations were extremely tough and twice both him and Merkel (if I remember correctly) nearly left the room because they couldn't agree and were called back in the room by Trusk (??? Sorry, not sure if the surname is correct…), that he never had a plan B and that he never had offers from Russia or China for help.  In the end, he tried to get the best deal for his country (managed to negotiate around 14 out of 20 reforms) and although the measures are extremely tough, he will do his best to implement them.  Regarding Greece leaving the Euro, he looked at a document given there with all the financial consequences and he said that they would be disastrous. The country is not prepared.

This is what I understood anyway.  Until very recently the northern Europeans were completely unaware of Greek culture & society which allowed Greeks to constantly go on about how they invented, democracy, philosophy etc. Now we know that that was 2000 years ago and that what we are dealing with now is more like (in fact very much like) Macedonia, Albania and Bulgaria. Corruption, clientelism and tribalism are rife. This Balkan form of organisation works to an extent but it can't provide the standard of living that Greeks have come to expect after 30 years of "money for nothing". That is why they only have two options: stay in the euro (and change dramatically over the next few years in order to find a societal, economic and political organisation that can sustain high standards of living) or leave (in which case they can do whatever they like but most likely will suffer a drop in living standards which will bring them in line with their immediate neighbours).

It is correct though, that the current mess is also, to a large extent down to the constant cash injections Greece has received from ignorant westerners. First because they wanted to revive ancient Greeks, then because they wanted to mess with the Ottomans, then to keep the communists out and finally (the chain of justifications comes full circle) because Greece (or rather the symbolism that it represents) is an integral part of our European identity.