Greece Secures a Bailout

Greece finalized its bailout from the Eurozone.

Euro-region ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, said Jean-Claude Juncker after chairing a meeting of euro-region finance ministers in Brussels yesterday. The 16-nation bloc will pay 80 billion euros at a rate of around 5 percent and the International Monetary Fund contributes the rest. Greece agreed to budget measures worth 13 percent of gross domestic product.

They say the crisis is over in the Euro's currency but that's only until the next time Greece or another nation winds up in this situation again. That's when not if.

Who Will Pay Greece's Bills?

It appears there's a power struggle forming for who will NOT help Greece pay off its debts.

After weeks of backing a European rescue for the financially troubled Greece, Germany shifted course on Thursday, signaling that help should come from the International Monetary Fund rather than Greece’s neighbors.

Meanwhile, France would like to see the EU help to bailout Greece. Greece is hoping to get a break on the rate their bonds are currently paying. Their bonds currently have a premium of 6.25%, almost three percentage points higher than Britain and the U.S. A lot of this comes down to geopolitical ego. Greece doesn't want to approach the International Monetary Fund because that's generally reserved for the developing world and Greece wants to maintain the appearance that it's already developed.

So, no one wants to step. The whole affair has shown just how flawed and vulnerable the EU is. A few years back, some were claiming this would challenge the U.S. in terms of economic might. With Greece's problems, the Euro has simply gotten crushed. Thus, a massive weakness has been exposed. The EU is driven as much by its weakest link as by its strongest.