The optimism of the early European Union treaties that impose rules such as the no-bail out clause seem to be remarkably indicative of strong economic times. Seeing that the most fiscally conservative country in the European Monetary Union, Germany, is even considering ignoring the stipulation as soon as the water turns sour. There are a lot of questions to be addressed when considering the fate of the Greek economy and the consequences the world could face in both bailout and non-bailout scenarios: the welfare state versus the austere, ingrained corruption versus political reform, and, obviously, moral hazard versus systemic risk. This complicated milieu of problems is the culmination of years of irresponsible social and fiscal practices that should, hopefully, teach the world a few lessons in accountability. The solution could lead the way in solving similar crises in the other EMU states, namely Portugal, Ireland, Italy, (Greece), and Spain, who are known collectively as the PIIGS. Though it seems to be a lot to ask for people to learn from their mistakes given the repetitive nature of financial crises.

The EMU seems to be completely split between these either side of all three issues, with those in Germany being the most vocal about the austerity, corruption, and moral hazard sides. The announcement of 30 billion for emergencies is indicative of this indecisive mood as some suggest that Greece will need 75 billion at an even lower interest rate to even stand a chance at surviving this crisis. Most of these estimates are even stated as cautiously optimistic as it is hard to imagine a country with such strict austerity measures growing enough to start fighting those deficits. The Greeks, though, are fervently claiming that they will not need to use the bailout but the markets, returning to above a 400 point spread on German bonds by April 16^th, do not seem to believe them. Unfortunately that is the nature of the Greek financial crisis: if Greece pulls out of this mess mixing strategies of austerity, growth, and debt reduction it will almost be as if they have proven contradictory axioms.
When the people are so adamant to retain their bloated welfare programs and distrustful enough of the government to remain corrupt it seems that the lesson will not be learned and it will prove those concerned about moral hazard correct. But supposing that Papandreou can do what no politician before him has, eliminate corruption, pull back on welfare, and remain in office as a trusted official, and that EMU is providing just enough support to pull them out of this mess it would be nothing short of an economic miracle.