The happenings in Greece and a number of other European countries such as Portugal and Spain are indeed grim. The Geek people are losing it and losing it fast and painfully. Greece and a number of other European countries are reeling under a financial and economic crisis that has its origin in the country's sovereign debt crisis. Poverty, hunger, destitution, unemployment, drug abuse, violence, crime, prostitution and economic and financial ruin are now a reality of life for a large segment of Greek population.

What adds to this misfortune is that thousands of our fellow Afghans are now stuck in Greek cities and towns. In pursuit of their dream of a comfortable life in Europe, these thousands of Afghans are caught in the midst of the Greek disaster.  

For a large number of Greeks, life has taken a sharp turn for worse. It has left them struggling to make ends meet and to survive in a country and economy that is fast sinking. The Greek economy has been decimated. The precarious condition of Greece was evident in the fact that last year, the Greek government went to the extent of auctioning many of its islands that lie in the sea off the shores of the Greek mainland.

The islands were offered to the banks and financial institutions that are Greece's creditors. Not only these islands but also some very critical public sector enterprises are being put on sale or have already been sold to Greece's foreign creditors.

Together with the Greek government's austerity drives to drastically cut back on public spending, the result has been massive layoffs of workers and employees in the public sector. The private sector too is fast losing its vitality.

Countless firms and companies are shutting shop. Countless others have already done so and many others will do in coming weeks and months as Greece descends into an abyss from which it will not be able to return at least until the present generation is around.

Much of the harm done to the Greek economy and the loss in that nation's prosperity and economic well-being is irreparable. Gone are the days when Greece was considered a fairly prosperous country. For a majority of Greek citizens and particularly the young generation, their dreams and ideals of a better tomorrow and future should be now put on hold for decades if not entirely shattered.

What went wrong in Greece is also the story of a number of other European countries. In Portugal and Spain the rate of unemployment has soared. In Spain, cities and towns that were bustling with life and economic activity during the earlier years of Spain's housing boom are now lying lifeless.

Young Spaniards are finding it even tougher to find jobs. Poverty and destitution are on a sharp rise. Unlike Greece that had and still has an unmanageable public finance situation, Spain had managed to maintain its public finances pretty well.

The country's annual budget deficit was low and the country's sovereign debt level was still in a manageable territory before the onset of the crisis. Spain is therefore, unlike Greece, is a victim of being tied to a loosely structured monetary and economic union that placed outside of Spain's reach levers needed to control its own economy and the financial inflows and outflows.

Spain's construction boom during the years before the onset of crisis in 2009 was made possible thanks to the inflow of under-regulated investments from European investors and financial institutions who, witnessing the surge in investment opportunities in Spain's housing market, channeled unprecedented investments into that country.

This period of boom was short-lived, however. With the onset of the crisis in the global financial system, these investments dried up and the result was a collapse in the housing market. The weakened Spanish economy also left less and less buyers and it further accelerated the downward spiral.

The road ahead for Europe and the 17-member common currency club is clear. The financial and economic situation in Greece is too precarious to let the country redeem its public finances even with harsher austerity measures and cutbacks in public spending.

Even after estimating a 2% annual growth rate for Greece and the proposed reductions in public spending as well as the new 130 billion euro bailout for the country, Greece's sovereign debt level would still hover around 150% even 5 years from now.

Greece was just extended 130 billion euros in loan by the European Union – second time so after a 110 billion euro bailout earlier in 2010. This loan is intended to enable Greece pay back part of its sovereign debt that will come due in early March.

What increasingly seems the inevitable fate for Greece is that the country's public finances cannot be returned to a sustainable path. This would force Greece to leave the common currency block and this, in essence, would amount to a default. European leaders such as Germany's Angela Merkel can be heard starting to talk of this eventuality. Unfortunately, such a fate is almost certain.

As the fate of the Eurozone hangs in balance, the Federal Reserve of the U.S. has come to the aid of the common currency block by giving it a $1 trillion loan. This loan has already been distributed among Eurozone's more than 500 private banks and will keep them above water for at least another year. But the main question here is that this process of credit creation and one bailout after another by using the public money cannot continue indefinitely.

Sooner than later, the time will come when no more bailouts will be possible. By that time runaway inflation and massive devaluation especially in U.S. dollar would have already happened.
The need of the time is to purge this financial system while adopting a more humane approach in dealing with such underwater countries as Greece.

Banks should indeed take a share of the losses they have incurred on their investments in countries such as Greece. On the other hand, governments and the public sector on which lives and livelihoods of millions depend should also be extended much greater support in Greece and elsewhere.

After all, capitalism for common people and socialism for the rich bankers is not aligned with principles of democracy. Unfortunately, as long as Europe continues to be controlled by these bankers from behind the scenes, no such solution would be forthcoming.