"What began as a debt crisis in Greece in late 2009 has evolved into a broader political crisis in Europe that many analysts believe could result in the most significant setback in over 60 years of European integration. Since 2009, Greece, its fellow European Union (EU) members, and the International Monetary Fund (IMF) have taken unprecedented steps in an effort to prevent a Greek default and ensure that Greece remains a member of the EU's 19member common currency area, the Eurozone. Key European leaders have consistently reiterated German Chancellor Angela Merkel's conviction that 'if the euro fails, Europe fails,' reflecting their belief that possible 'Grexit' from the Eurozone, the EU's flagship project, could seriously undermine the integrity of the Eurozone and even the EU itself. Nonetheless, a series of events in late June/early July--including Greece's failure to make a scheduled payment to the IMF and the enactment of capital controls on Greek banks-- led many analysts to declare that a possible 'Grexit' from the Eurozone was increasingly likely. Such fears were at least temporarily allayed on July 13, when Eurozone leaders declared that they had reached a provisional agreement to provide Greece with additional financial assistance. Many analysts question the political and economic viability of the agreement, however, and worry that 'Grexit' could still loom in the longer term."
CRS Insight, IN10303