Greece's euro gamble

Greece wa the only country that failed the joining criteria

By business reporter Jonty Bloom

Greece, it seems, is ready to take its seat at the top table.

Following the general election earlier this month, it will continue with its policy of taking the drachma into the euro. For too many years, they say in Greece, the country has been the waiter at the top table but hasn't had a seat there itself.

That is one of the reasons it has made such efforts to join the euro, and what efforts they have been?

From being the only country which actually failed the Maastricht criteria and therefore couldn't join at the start, Greece has brought down its debt and inflation levels, so that it now qualifies.

The drachma is expected to catch up with the rest of the eurozone and join the single currency next year.

Taking a gamble

However, there is still a long way to go.

Living standards in Greece are just 70% of the average in Europe and the country still needs to take big steps in reforming or privatising state-owned industries and improving its economy.

There are also fears that the Greek economy has qualified for the euro by "limbo dancing" - making great efforts to meet the requirements only to let things go as soon as they are under the barrier.

Even if the Greek economy can take the discipline of EU membership, there is likely to be tough times ahead.

The eurozone's economies may be growing quickly these days, but it is also true that the whole of the zone should now be acting as one giant domestic economy.

That is likely to mean that fewer companies will dominate the market and that may well mean that the prosperous areas of Europe will become richer at the expense of outlying regions.

That happens in most countries now but is ameliorated by government action to move spending and jobs away from the centre and back to less developed areas.

Poorest EU country

Even so, it isn't a very successful policy in most countries let alone across the whole of Europe.

It is also the case that the EU is much less capable of supporting less successful areas.

It doesn't have the money or the power to do so on anything like the scale that national governments can.

For Greece, this means the euro is even more of a risk than it is for other members.

As the poorest country in Euroland, it is hoping that the overall economic benefits of membership will outweigh the possible loss of homegrown economic success, as money and business flows to the economic centre of Europe.