W locaLed prlmarlly ln Lurope W formed by slx counLrles W 1he Luropean unlon ls an economlc and pollLlcal unlon of 27 ln 19381he Lu has developed a slngle markeL Lhrough a sLandardlsed sysLem of laws whlch apply ln all member sLaLes W W Lu pollcles alm Lo ensure Lhe free movemenL of people goods servlces and caplLal enacLs leglslaLlon ln [usLlce and home affalrs and malnLalns common pollcles on Lrade agrlculLure flsherles and reglonal developmenL W opulaLlon of 73 of Lhe world W Lu represenLs an esLlmaLed 20 of global Cu when measured ln Lerms of purchaslng power parlLy lnLroducLlon W ?ears of unresLralned spendlng cheap lendlng and fallure Lo lmplemenL flnanclal reforms lefL Creece badly exposed when Lhe global economlc downLurn sLruck 1he debL levels and deflclLs LhaL exceeded llmlLs seL by Lhe Luro zone were revealed exposed W ln Lhe flrsL quarLer of 2010 Lhe naLlonal debL of Creece was puL aL t300 bllllon ($4136 bllllon) whlch ls blgger Lhan Lhe counLrys economy 1he counLrys deflclL (lLs expendlLure ln comparlson Lo lLs revenue) ls 127 8ackground Creece durlng llnanclal Crlsls W Lconomy of Creece W llCS Creece has spread Lhe rlsk Lo oLher weak and lndebLed Luroarea economles 1he AcLual Crlsls W MosL counLrles have seen esLlmaLes for Lhelr budgeL deflclL swell over Lhe course of 2009 buL Lhe magnlLude of Lhe Creek revlslons over boLh 2008 and 2009 and Lhe lmpllcaLlons for excesslve exLernal debL flnanclng has been shocklng 1he esLlmaLed 2009 deflclL rose from 31 for 2009 as reporLed Lo Lhe Luropean Commlsslon durlng Lhe sprlng Lo 127 lmpacL of Crlsls W SouLheasLern Lurope Creece's forelgn pollcy focus on Lhe reglon and growlng Lrade volumes beLween Lhe counLrles nelghborlng Serbla Albanla Macedonla 8omanla 8ulgarla and 1urkey cannoL remaln lndlfferenL Lo Lhe magnlLude of Lhe crlsls nexL door W Creece ls already ln ma[or breach of Luro zone rules on deflclL managemenL and wlLh Lhe flnanclal markeLs beLLlng Lhe counLry wlll defaulL on lLs debLs Lhls reflecLs badly on Lhe credlblllLy of Lhe euro W lmpacL on prlvaLe lndlvlduals 1he mosL obvlous way would be Lhrough Lax bllls as Lurope agrees Lo rlde Lo Lhe rescue and help Creece deal wlLh lLs mounLlng publlc and forelgn debLs Any asslsLance Lo Creece wlll come aL a cosL LhaL wlll ulLlmaLely have Lo be borne by Laxpayers ln Lhe naLlons LhaL conLrlbuLe Creek crlsls has made lnvesLors nervous abouL lendlng money Lo governmenLs Lhrough buylng governmenL bonds Lverybodys lnLeresL raLes are headlng hlgher as governmenLs are havlng Lo pay a greaLer rlsk premlum Lo borrow money W 8educed wealLh 1akehome pay ls llkely Lo fall as lL ls eroded by rlslng Laxes and everyone wlll have Lo work longer before Lhey reLlre by whlch Llme Lhey are llkely Lo flnd LhaL Lhelr penslons have shrunk W S|ower recovery 1he crlsls ls also seL Lo slow down Lhe economlc recovery eso|ut|on Conc|us|on W 8a||out p|an Luropean governmenLs and Lhe lnLernaLlonal MoneLary lund (lMl) have sLunned global sLock markeLs wlLh a 730bneuro ($973bn 630bn) package of sLandby funds deslgned Lo see off flnanclal melLdown 1he 27 counLrles of Lhe Luropean unlon (Lu) wlll conLrlbuLe 300bn Luros Lowards Lhe flnanclal safeLy neL 1hey have been [olned by Lhe lnLernaLlonal MoneLary lund (lMl) whlch ls provldlng oLher 230bn Luros 1he vasL bulk of Luropes conLrlbuLlon comes from Lhe 16 naLlon Lurozone bloc whlch ls promlslng 440bn ln loan guaranLees 1he Luropean Commlsslon ls provldlng 60bn Luros lmmedlaLely W ermany and the Luro rescue p|an W Cermanys parllamenL has approved Lhe counLrys conLrlbuLlon Lo a 730bn euro ($938bn 631bn) rescue deal for Lhe Lurozone W 1he Cerman conLrlbuLlon ls key Lo Lhe plan and would amounL Lo up Lo 148bn Luros Chancellor Angela Merkel warned LhaL Lhe Luro would be ln danger wlLhouL sLrong acLlon W @he ro|e of reece Creece has ouLllned plans Lo cuL lLs budgeL deflclL or Lhe amounL lLs publlc spendlng exceeds LaxaLlon Lo 87 of lLs Cu ln 2010 and Lo less Lhan 3 by 2012 W !usL before Lhe masslve ballouL package was announced Lhe Creek governmenL pledged Lo make furLher spendlng cuLs and Lax lncreases LoLalllng 30bn euros over Lhree years on Lop of ausLerlLy measures already Laken Concluslon W Creece's uebL Crlsls has puL Lhe Lu under Lhe scope lL has shlfLed Lhe aLLenLlon Lo Lhe efflclency Lhe success of Lhe Lurozone lL's consldered as probably Lhe blggesL LesL Lhe Lu ( Lhe LMuln parLlcular) has gone Lhrough Pow Lhe Lu Creece are handllng Lhe crlsls wlLh Lhe whole ballouL plan wlll reflecL Lo whaL exLenL Lhe Lu ls able Lo funcLlon on lLs own as a powerful economlc enLlLy W lL's Loo early yeL Lo measure Lhe effecLlveness of Lhe ball ouL plan