Greece is going bankrupt! The Eurozone is crumbling! There are hippos and lions wandering the streets of Tbilisi! Well the thing about the hippos in Tbilisi is true, anyway. Apparently the zoo animals have all escaped during some devastating floods in the capital of the Eastern European nation of Georgia. As to the rest, well, it's all part of Europe's current worry that the Euro, the region's shared currency and 16-year-old experiment, won't survive. In Europe the news that Greece can't make the payments on its loans makes for great headlines. In the U.S., all this European frisson mostly turns up in our investment statements. It's one of the big reasons for that annoying little crawl your investment account has been doing over the past month (last week Golman Sachs declared that our markets were "boring").
To be fair, the niggling daily losses, gains, losses and regains aren't entirely Greece's fault. Our over-caffeinated stock market analysts are flipping coins about when the Federal Reserve is going to raise interest rates,too. But Greece does make a difference. Why? Unless you've been investing big in Greek canned peaches (one of their strongest exports), what you're really worried about is the domino effect within Europe and then, to the rest of us. [Note: I have included a nifty link here in case you would like to import some canned Greek peaches].
The European member created their fancy new currency back in 1999 to turn themselves into one big trading block. That means that they have given and taken out loans to one another, they sell their products—and their peaches—to one another, and their workers all rely on jobs that may well be in the next country over (in 2012 French candidates campaigned in London to reach their voters). This picture of unity works pretty well when times are good, but if country #1 doesn't pay back the loans from country #2, or even if its people can no longer buy those great country #2 imports, then country #2 starts to go down the economic drain. And since everyone is integrated with everyone else, that means country #3 starts to go, along with country #4, country #5, etc... You get the idea.
It turns out that as far away as Europe feels sometimes from the U.S., we do have an awful lot of our own economics tied up in it. And so do Asian countries, African countries and well, Australia. The dominos just keep falling.
So why does Greece matter? Because you don't need lions and floods and hippopotamuses to bring down an economic system. Sometimes knocking over a can of peaches will do it.