What do you think?
Rate this book
Bust: Greece, the Euro and the Sovereign Debt Crisis (Bloomberg
In 2001, Greece saw its application for membership into the Eurozone accepted, and the country sat down to the greatest free lunch in economic history. However, the coming years of global economic prosperity would lead to unrestrained spending, cheap borrowing, and a failure to implement financial reform, leaving the country massively exposed to a financial crisis—which duly struck. In Greece, the Euro, and the Sovereign Debt Crisis , Bloomberg columnist Matthew Lynn explores Greece's spectacular rise and fall from grace and the global repercussions of its financial disaster. Page by page, he provides a thrilling account of the Greek financial crisis, drawing out its origins, how it escalated, and its implications for a fragile global economy. Along the way, Lynn looks at how the Greek contagion has spread like wildfire throughout Europe and explores how government ineptitude as well as financial speculators compounded the problem. Blending financial history, politics, and current affairs, Lynn skillfully tells the story of how one nation rode the wave of economic prosperity and brought a continent, a currency, and, potentially, the global financial system to its knees. Lively, engaging, and thought provoking, Bust reminds us just how interconnected the world really is.
Q&A with Author Matthew Lynn
Author Matthew Lynn Bust looks at how the sovereign debt crisis started in Greece, but why did it start there?
Greece was one of the most profligate nations in the world. It has been virtually continually in default on its debts in one form or another ever since the modern Greek state was created in the nineteenth century. So it was always a fairly good candidate. At the start of 2010, the markets were already getting worried about sovereign debt. It was essentially Act II of the credit crunch. Governments all around the world had fixed a private debt crisis by turning it into a public debt they ran up these huge deficits, both to bail out their banking systems and to boost their economies. But the public debts were never any more sustainable than the private debts. Greece happened to be the easiest country to make an example of. But if it hadn’t been Greece, it would have been someone else. This was really a crisis about the markets refusing to sanction unending government deficits – and that’s what the book explores. But the book implies this is a story about the euro as well? Why is that?
It certainly is. The sovereign debt crisis blew apart the euro, and it is going to be very hard to put it back together. Europe’s single currency celebrated its first decade of existence in pretty good shape. The currency was stable, new members were joining, and it was gaining ground on the dollar as the world’s most important currency. But then the Greeks came along and put a bomb underneath it. Greece lied and cheated its way into the euro. It completely made up the figures that squeezed it into the euro, and, once it was inside, made no attempt to play by the rules. When confidence in the country collapsed, they expected the rest of Europe to bail them out. But what kind of club is it where you can cheat your way in, ignore the rules, then expect the other members to pick up your bar bills? Not one that anyone is going to want to belong to for long. So this is not just a story about the sovereign debt crisis – it is a story about how the euro is falling apart, and how that will change the European Union as well. What did you learn from writing the book?
The book was a real education for me. That was one of the reasons I wrote it. I wanted to learn more about how this fairly small country right on the edge of Europe which no one usually paid very much attention to was suddenly right at the epicentre of a major financial crisis. It’s not the kind of story you can make sense of just by reading a few headlines. There were so many strands that had to be pulled together. The history of Greece, and why its economy was so underdeveloped. The design of the euro, and all the compromises that led up to its creation that proved to be crippling once the crisis struck. The changing nature of Germany, how it had overcome post-war guilt, and why it was refusing to bail-out the rest of Europe any more. The build-up of government debt right around the word. All of these big themes came together to produce this crisis, and that is what made it such a fascinating book to write. What are the implications for the world economy of the themes you explore in the book?
Firstly, it’s the end of the euro, at least in its current form. It was a disaster to bail-out Greece, and, curiously enough, I think a lot of the people right at the very top of the policy-making debate knew that. It created a single currency with all the wrong incentives. It would have been far better to let Greece go bust and then to deal with the consequences of that than to try and patch up a broken system. But, in the end, and this process is detailed in ...
Q&A with Author Matthew Lynn
Author Matthew Lynn Bust looks at how the sovereign debt crisis started in Greece, but why did it start there?
Greece was one of the most profligate nations in the world. It has been virtually continually in default on its debts in one form or another ever since the modern Greek state was created in the nineteenth century. So it was always a fairly good candidate. At the start of 2010, the markets were already getting worried about sovereign debt. It was essentially Act II of the credit crunch. Governments all around the world had fixed a private debt crisis by turning it into a public debt they ran up these huge deficits, both to bail out their banking systems and to boost their economies. But the public debts were never any more sustainable than the private debts. Greece happened to be the easiest country to make an example of. But if it hadn’t been Greece, it would have been someone else. This was really a crisis about the markets refusing to sanction unending government deficits – and that’s what the book explores. But the book implies this is a story about the euro as well? Why is that?
It certainly is. The sovereign debt crisis blew apart the euro, and it is going to be very hard to put it back together. Europe’s single currency celebrated its first decade of existence in pretty good shape. The currency was stable, new members were joining, and it was gaining ground on the dollar as the world’s most important currency. But then the Greeks came along and put a bomb underneath it. Greece lied and cheated its way into the euro. It completely made up the figures that squeezed it into the euro, and, once it was inside, made no attempt to play by the rules. When confidence in the country collapsed, they expected the rest of Europe to bail them out. But what kind of club is it where you can cheat your way in, ignore the rules, then expect the other members to pick up your bar bills? Not one that anyone is going to want to belong to for long. So this is not just a story about the sovereign debt crisis – it is a story about how the euro is falling apart, and how that will change the European Union as well. What did you learn from writing the book?
The book was a real education for me. That was one of the reasons I wrote it. I wanted to learn more about how this fairly small country right on the edge of Europe which no one usually paid very much attention to was suddenly right at the epicentre of a major financial crisis. It’s not the kind of story you can make sense of just by reading a few headlines. There were so many strands that had to be pulled together. The history of Greece, and why its economy was so underdeveloped. The design of the euro, and all the compromises that led up to its creation that proved to be crippling once the crisis struck. The changing nature of Germany, how it had overcome post-war guilt, and why it was refusing to bail-out the rest of Europe any more. The build-up of government debt right around the word. All of these big themes came together to produce this crisis, and that is what made it such a fascinating book to write. What are the implications for the world economy of the themes you explore in the book?
Firstly, it’s the end of the euro, at least in its current form. It was a disaster to bail-out Greece, and, curiously enough, I think a lot of the people right at the very top of the policy-making debate knew that. It created a single currency with all the wrong incentives. It would have been far better to let Greece go bust and then to deal with the consequences of that than to try and patch up a broken system. But, in the end, and this process is detailed in ...
- GenresEconomics
288 pages, Hardcover
First published December 21, 2010
2 people are currently reading
85 people want to read
About the author
Matt Lynn
20 books76 followersI am a thriller writer, living near London. 'Death Force' is the first in a series of books following a group of mercenaries around the world. It owes a lot to action, adventure writers like Alistair MacLean, and World War Two writers like Sven Hassel. It also owes a lot to Westerns. When I'm not writing thrillers, I write a financial column for Bloomberg, and I write for The Spectator.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 7 of 7 reviews
July 17, 2012
"The Snake and the EMS were both quite rightly regarded as failures. They had foundered on two main rocks. Any attempt to fight the foreign exchange markets was always doomed to ultimate failure. And any attempt to tie together very different economies was always going to produce strains and tensions that would in the end tear the system apart." (19)
"Between 1999 and 2001, something very mysterious -- and indeed convenient happened. The Greek economy completely transformed itself. Just like that. The budget deficit came down to just 1 percent of GDP. Inflation dropped to just 5 percent. Public debt was still running at around 100 percent of GDP, but at least it wasn't going up as fast as it had been, and since it was now below that of both Italy and Belgium, which were already inside the euro-zone, it was going to have to use that as a reason for keeping Greece on the outside." (51)
"There is no activity that bankers are more skilled at than collecting a generous fee for acting as middlemen on an essentially risk-free trade. It is, to put it kindly, the purpose for which God put bankers on the planet." (105)
"In reality, the sovereign debt crisis was a verdict -- and a damning one -- on three decades during which governments across most of the developed world had pushed up spending without paying any serious attention to whether their economies, and and often-dwindling, over-taxed workforce, could pay for it all." (204)
"Between 1999 and 2001, something very mysterious -- and indeed convenient happened. The Greek economy completely transformed itself. Just like that. The budget deficit came down to just 1 percent of GDP. Inflation dropped to just 5 percent. Public debt was still running at around 100 percent of GDP, but at least it wasn't going up as fast as it had been, and since it was now below that of both Italy and Belgium, which were already inside the euro-zone, it was going to have to use that as a reason for keeping Greece on the outside." (51)
"There is no activity that bankers are more skilled at than collecting a generous fee for acting as middlemen on an essentially risk-free trade. It is, to put it kindly, the purpose for which God put bankers on the planet." (105)
"In reality, the sovereign debt crisis was a verdict -- and a damning one -- on three decades during which governments across most of the developed world had pushed up spending without paying any serious attention to whether their economies, and and often-dwindling, over-taxed workforce, could pay for it all." (204)
April 14, 2013
A well-written and very accessible primer. Highly recommend it to anyone interested in learning about the root-causes of the sovereign debt crisis. Not sure I agree with all of the author's conclusions and predictions, but credit to him for the having the courage of his convictions to make them, and put it down in writing.
August 24, 2025
Thorough review, I liked the angle of thought
May 17, 2015
Great writer, good voice, clearly and articulately explained complex economic ideas so that a layman can understand. Moral of the story is: socialism and poor financial management, along with an almost pathological hatred of austerity, ruined Southern Europe, and the introduction of the euro ruined the rest of the euro zone shortly after. Hopefully this sad currency can be put out of its misery soon.
October 29, 2011
Interesting, recently familiar and very sad
December 19, 2015
Not essential for an understanding of the crisis. A good newspaper would do.
Read
April 18, 2016A nice overview
Displaying 1 - 7 of 7 reviews