EU Bails Out Greece, Crisis Far from Over

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BERLIN -- After fears the Greek debt crisis was spreading like the Ebola virus, the European Union and International Monetary Fund announced a massive $145 billion bailout to keep Greece from defaulting on its debt.

Even so, the Greek crisis is far from over. Some fear it could have a domino effect and place the future of the euro currency in question. Such an occurrence would have big implications for the U.S. economy.

Debt Jitters Hit European Markets

The euro fell after news of Monday's bailout on the belief by market watchers that although the new loans and austerity measures will stave off bankruptcy for now, they won't fix the Greek economy long term. And other countries could be next.

Italy is also under an economic death watch, along with Spain and Portugal.

The EU's poorer southern nations are running huge budget deficits due to the recession, and with poor credit ratings - Greece's has been downgraded to junk status - they have to borrow heavily at steep interest rates just to keep going.

Consequently, the EU is looking to Germany, the country with the deep pockets, to fix the mess.

German Public Balks at Greek Bailout

However, the German public doesn't want anything to do with the matter, with most opposing the bailout. Germany has run a tight ship, but many German citizens don't think Greece has done likewise and they don't want to help the Greeks now.

One Berliner said "it's completely unfair." Germany has its own deficits and unemployed, and "we should not be paying for others."

Another Berlin resident said "something has to be done," but that Greece needed to get their economic act together.

Almost 9 out of 10 Germans opposed the bailout. But German leaders, facing an EU-wide financial meltdown, caved in and have agreed to shoulder the biggest share of the loan.

The problem is, if or when the debt crisis spreads, there won't be enough cash to stop the next default.

The End of the Euro?

That's why some believe a process is unfolding that could mean the end of the euro as we know it. Among them is successful hedge fund manager Dennis Gartman, who has put his money on it.

"I think the euro will cease to exist in the not too distant future," he predicted. "Certainly within two years there will not be the euro that we know the euro today to be.

German EU expert Almut Moeller disagrees.

"There are no discussions at the moment among the governments in the eurozone to abandon the euro, to go back the currencies of the past," Moeller said. "I simply don't see this happening."

But Gartman says Greece's problems are long-term. And he thinks at least one other country will default, if not more.

"I think it's only a matter of time. Italy certainly will. Portugal probably will. Spain may," Gartman said.

Still, Europe's misery will mean good things for the U.S economy: attracting more capital, strengthening the dollar, lowering interest rates and the price of oil.

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CBN News
Dale Hurd

Dale Hurd

CBN News Sr. Reporter

A CBN News veteran, Dale Hurd has reported extensively from Western Europe, as well as China, Russia, and Central and South America.  Since 9/11, Dale has reported in depth on various aspects of the global war on terror in the United States and Europe.  Follow Dale on Twitter @HurdontheWeb and "like" him at