Proof Membership of the €euro Comes at a heavy Price!

Greece finds out that membership of the € euro has cost them dearly, Greece is in deep financial SHIT!

"We need to save the country from bankruptcy."

Those were the words of Greece's new prime minister George Papandreou after announcing the draft budget on November 5.

Greece is the most indebted country in the Eurozone and has the misfortune to be heading deeper into recession as many countries appear to be heading out.

The budget deficit stands at almost 30bn euros a year - a staggering 12.7% of GDP.

Membership of the euro has its advantages but it also means that Greece does not have the ability to devalue its currency or print money.

Instead the 11 million people who live here are being asked to swallow a series of changes.

Most people believe, with good reason, that the worst is yet to come.

Journalist Alkman Granitas on the Greek economy

"There has already been an increase in mobile phone taxes, alcohol taxes, a new property tax and a pay freeze in the civil service," says Alkman Granitas, a journalist with Dow Jones, who lives in Athens. "Most people believe, with good reason, that the worst is yet to come."

Very few commentators believe that Greece is about to default on its debt, countries like Ukraine and Argentina are of much greater concern. But there is an anxiety about the prospects for the long term. Tourism - upon which the economy depends - is down sharply, so too are shipping revenues, another important source of funds for the government.

The government is planning to reform the public sector as it is over-staffed and regularly overspends, public pensions - the cost of supporting an ageing population - and tax evasion, as no one pays what they should. It is a radical agenda and is likely to encounter opposition.

Tourism is a major source of income This is the birthplace of democracy, people here love a good demonstration. Reform could well run into problems and, traditionally, when government has squared up to the unions it has ended up nursing a bloody nose.

The truth is that companies go bust, countries get bailed out.

If Greece does find itself in a position where it is no longer able to repay what it owes, someone will have to ride to the rescue. So who would it be? I spoke to Yannis Stournaras, a former government economic adviser. "We are a rich country with poor finances. The Greeks themselves can repay their debts. There is no plan B," he said.

The Greek economy had 16 years of impressive growth before this recession. Successive governments choose not to reduce the country's mountain of debt. They failed to fix the roof in a place where they say the sun always shines and, with hindsight, that was a big mistake.