Euro's fate is tied to that of reeling Greece

Greek Prime Minister George Papandreou has formally requested access to a 45 billion euro (Dh221 billion) aid package from members of the euro zone and the International Monetary Fund (IMF).

Without the aid, Greece will not be able to make repayments due on its loans by May 19 — creating the spectre of a sovereign debt default. A sovereign default while the international financial system is still creaking under the weight of the global economic crisis could plunge world trade and commerce back into recession.

For this reason alone, the IMF and euro zone countries must step in to rescue Greece, no matter how much the country may not deserve it. The Greek government has covered up the true extent of its debts and has appeared reluctant to take the difficult budgetary decisions necessary to tackle its problems. Greek civil servants and unions are still resisting some of the conditions in a rescue plan that would require cuts in the public service and state benefits. This is not reasonable. Athens and every other national government must learn to live within its means, especially during these difficult times.

In terms of existing agreements, the IMF has been tasked with ensuring that Greece makes the budget cuts needed to ensure that it can repay its debt and adopts more conservative economic policies.

Germany, which has Europe's largest economy and will pick up a lot of the bill, was reluctant to bail out Athens. But, the reality is that a sovereign default by Greece would also mean the end of the euro. The single European currency is, in part, underpinned by the expectation that strong national economies will ensure the financial stability of all member countries. Without this, countries will break away from the prescriptions of the euro and common economic policies to protect their national interests.