Greece has come into the limelight as it is one of the eurozone members with high fiscal deficit as well as high debt. The first warning bells have come with the Greek economic crisis, but if the fiscal sustainability of other distressed EU nations is not immediatly checked, the EU will face a serious problem.

Since its inception over a decade ago, the euro had increasingly reflected its possibility to be one of the strongest currencies in the world. In fact, the dollar was severely threatened by the euro at one point. In May 2008, the European Commission published an analysis of the monetary union and referred to it as "an achievement of strategic importance for the EU and indeed for the world". However, the euro fell significantly post financial crisis and one of the major reasons attributed to this downslide was the Greek economic crisis. Greece, as one of the members of the Eurozone, has threatened the stability of the monetary union through its poor fiscal management. The Eurozone is a union of 16 economies. All these economies have one common monetary policy dictated by the European Central Bank but are allowed to have divergent fiscal and political policies. This autonomy in fiscal decisions prompted Greece to abandon all fiscal restraint when it declared a fiscal deficit of 12.7% of its GDP last year. As the debt increases, the earlier promises of government jobs, education subsidies and assured lifetime pensions come under the threat of being withdrawn raising worries about a political repercussion.

Greece has come into the limelight as it is one of the Eurozone members with high fiscal deficit as well as high debt. Other countries with high fiscal deficit are Ireland at 12.2% of GDP in 2009 and Spain at 9.6%. However, Greece has net public borrowing at 86% of the GDP but the same figure stands at 25% and 33% of GDP for Ireland and Spain respectively. On the other hand, Italy has a net debt ratio of 97% but its fiscal deficit is much lower at 5.5%. Portugal has net debt of 56% of GDP and a deficit of 6.7% of GDP. Hence, although the fiscal position of many euro economies is weak, Greece occupies the highest position in fiscal mismanagement. These economies—Portugal, Ireland, Italy, Greece and Spain—have been given the acronym `PIIGS'. These economies are all beyond the acceptable levels of fiscal deficit as well as current account deficit.

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