Greek Debt Crisis
Greece & its European Union creditors have announced an agreement from EU Brussels Headquarters as of Monday the 13th of July 2015. The agreement aims to resolve the Greek crippling debt crisis & keep it within the Eurozone. However, to achieve this it requires further tightening of already squeezed budgets. It could be predicted that Prime Minister Alexis Tsipras will encounter difficult reconciling these regulations with an incensed Greek public.
The International Monetary Fund have already threatened to withdraw support for Greece’s bailout unless European leaders agree to nominal debt relief. The Greek Parliament pushed through painful new austerity measures early Thursday the 16th.
What happens next for Greeks & it’s Eurozone counterparts? An unanswered query is whether the deal gives the European Central Bank the confidence to continue funneling badly needed funding to Greek banks.One open
Chancellor Angela Merkel of Germany has stated as part of Greek commitments, a fund will be created to use the proceeds from selling off assets owned by the Greek government to help pay the country’s staggering debt. Figures quoted by the almighty Chancellor were in the region of €50 billion
Greece will also need to seek assistance from the International Monetary Fund. They will also have to agree to let the organization continue to monitor the country’s compliance to its bailout commitments.
Despite this, Greek banks are expected to remain closed this week. In order to be able to reopen, the banks require more emergency funds from the European Central Bank.
How does the Greek financial crisis affect the global coffers? Will this have a knock on effect to the global financial system? Will the impacts be solely to the European Union countries wallowing within the euro?Ninteteen nations are bound into the Eurozone in a single euro currency.
The Greece’s debt crisis commenced causing trouble for Europe in 2010. Following the drama, most international banks and foreign investors have sold their Greek bonds and other holdings. This strengthens their position as they are no longer vulnerable to Greek instability.
Many experts have worried a Greek-catastrophe would spill over to global economy in Trojan-proportions. Thus far, disaster has been avoided for the most extent, the euro taking a few hard knock not withstanding. Following the almighty 2008 financial crash, many economies are re-emerging from the debris of debt. Greece is bucking the trend. Its trouble began in 2009 when Greece stated it had been understating its deficit figure for some time. Alarms were beginning to be rung in relation to Greek finances. Things have not improved since then for the Greek people, despite two bailouts following
The money from the bailouts was supposed to buy Greece time. The time to stabilize its finances, the time to quell market fears about the breakdown of the euro union. The time has been served, but the Greek economic problems haven’t gone away. The Greek economy has shrunk by a quarter in five years, and unemployment is above 25 percent.
Many economists & certainly many Greeks blame the strict austerity measures imposed as part & parcel of the bailouts for their continuing woes. The country’s creditors, in particular chief commander Germany, blame the Greeks inability to conduct the financial overhauls required of them.
In all circumstances, the scenarios is not a good look for the European Union. What was a financial powerhouse is now squabbling amongst each other on the global stage. All at a time when the finance phoenix is supposed to be rising from the ashes of the great financial crash.
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