It has been two years since cracks first started appearing in the single currency.
Markets were spooked when Greece admitted in October 2009 that it’s debt pile was larger than previously thought.
But as Jean Pisani-Ferry, the director of the Bruegel think-tank, told euronews, eurozone leaders have been too slow to react.
“They said Greece could be saved, then they said Greece would be saved by reducing its debt at the initiative with the banks. Now, they say Greece can be saved with a bigger reduction. It’s difficult to be convincing when you change your position from one month to the next under the pressure of the markets,” said Pisani-Ferry in an interview.
Greece is not the only country to have been bailed out with EU and IMF help. In April last year, Athens agreed a 110-billion-euro package. Ireland and Portugal also received rescue funds.
EU leaders then created the European Financial Stability Facility, a larger fund of 440 billion euros.
But critics say even that may not be enough.
“440 billion euros. It seems a lot, but you have to take out what has already been promised to Greece, Portugal and Ireland,” said Pisani-Ferry.
“You also must consider the potential for a forthcoming bank recapitalisation,which will cost some 250 to 300 billion euros. The European Central Bank has already bought Spanish and Italian bonds for some 90 billion euros.”
In July, the 17 eurozone countries agreed a second bailout for Greece, worth 109 billion euros.
But it took three long months to get the approval of 17 national parliaments; the vote in Slovakia brought down the government.
Using stability facility funds needs the green light from all eurozone countries.
The European Central Bank is also playing a large part in supporting the euro by buying up sovereign debt, a shift from its original mandate of providing the economy with liquidity.
The European Commission’s response to the debt crisis has been to propose greater regulation of the financial sector.
Tighter rules on rating agencies and a financial transation tax are two ideas being floated by the EU’s executive arm.