June 22, 2011
The Greek financial crisis has been the most important economic story of the year—but what it actually means can be lost in breathless talk of defaults and loan tranches.
Luckily for those of us who aren’t keeping a close eye on the bond market or the price of the Euro, Reuters has put together a quick guide to the Greek crisis . The takeaway: Greece is on the verge of a Lehman Brothers-sized collapse.
So, why does it matter to the rest of the world? In short, if Greece defaults on its loans, a lot of European banks that hold the debt would suffer. The credit market would freeze—meaning banks may stop lending to each other. Not a positive thing for a global economy still in recovery.
Nor is Greece’s current crisis a sudden event; this has been building up for years. If you’ve got more time this afternoon, author Michael Lewis  (of Liar’s Poker  and The Blindside  fame) wrote a longer piece for Vanity Fair last year  tracing the root causes of Greece’s woes. It’s pretty astounding.