Since the eruption of the Greek debt crisis, many have declared the failure of the euro currency experiment.

Matthew Lynn, a business writer, gives a detailed explanation of this failure in his book Bust: Greece, the Euro and the Sovereign Debt Crisis.

First, it was indeed an experiment. No one has tried to merge the currency of 17 nations before, said Lynn.

Moreover, the experiment is more of political rather than an economic undertaking.

This is problematic because highly impactful economic policies -- like the introduction of the euro currency -- were not made primarily out of economic considerations.

In Greece's case, it was quite obvious that the country's economy had major problems and wasn't a fitting candidate to join the euro currency.

However, Lynn said European officials, from a political perspective, just couldn’t repeatedly turn down Greece's application for membership.

It would call into question the whole direction the European Union was traveling, which was to have a closer union between all the members and…[eventually] creating a single government, said Lynn.

Why wasn't Greece fitting for the euro currency?

The reason is simply that Greece, which resembles an emerging market country, has a fundamentally different economy than developed countries like Germany and the Netherlands.

This kind of economy warrants a level of borrowing cost that's higher than that of Germany. When Greece adopted the euro currency, however, its borrowing cost was dramatically reduced.

Of course, for countries prepared to spend money intelligently for the purpose of propelling economic growth, lowering the borrowing cost is always beneficial.

However -- in yet another reason why Greece should not have joined the euro currency -- the Greek economy, government, and business climate wasn't prepared to correctly handle cheap financing.

Instead of using it productively, Greece just ran up government debt by providing excessive benefits to its citizens and allowing rampant tax evasion.

Lynn named two extreme examples.

One, unmarried daughters would inherit their deceased father's government pensions. Not only is this an expensive and medieval policy, it also created the distorted financial incentive for women to not marry. Two, only a few hundred people in Athens paid their swimming pool taxes while a look at Google Maps revealed that there are in fact 18,000 private swimming pools in the city.

The tragedy of all this, said Lynn, is that Greece missed the wave of globalization in the last decade, which is what a country in its position should have done. Turkey, a neighboring country with a comparable economy, participated in the globalization trend and is now doing better economically.

So not only did Greece experience subpar growth for a decade (and fail to develop key industries and improve its infrastructure), it will be stuck with many years of economic difficulties in the future because of the huge debt load.

Recognizing the flaws of the euro zone, many experts suggested reforming it by centralizing fiscal authority to a European level.

Lynn, however, said such reforms are politically unfeasible and the euro should be disintegrated.

Indeed, if German taxpayers were so angry at bailing out Greece and Greek citizens rioted at having to endure austerity measures, why would these people agree to make the even bigger adjustments necessary for creating a unified Europe?

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