Posted:
I don't know economics much but had seen this answer on quora and i think it may make it clearGreece became the epicenter of Europe's debt crisis after Wall Street imploded in 2008. Greece announced in October 2009 that it had been understating its deficit figures for years, raising alarms about the soundness of Greek finances. So it all started with a lie. And as a consequence, Greece was prevented from borrowing in the financial markets (Broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives). By 2010, it was veering toward bankruptcy, which threatened to set off a new financial crisis. To avert calamity, the International Monetary Fund, the European Central Bank and the European Commission (they are collectively referred to as Troika) issued the first of two international bailouts for Greece, which would eventually total more than 240 billion euros, or about $264 billion at today's exchange rates.
The bailouts came with conditions. Lenders imposed harsh terms which required Greece to take actions that could reduce the government deficits, overhaul its economy by streamlining the government, end tax evasion and make it an easier place to do business. The money was meant to revitalize the Greek economy but the money has gone in repaying the debts, as a result of which the economy has shrunk by a quarter in five years.It is as bad as it can get. Greece needs to payback $1.7 billion, to the I.M.F. by Tuesday midnight. If Greece misses the deadline it will default on its debt and if it goes bankrupt or decides to leave the 19-nation Eurozone, the situation could create instability in the region and reverberate around the globe (which is most likely to happen).
- How bad is the current situation?
Thank you...This definitely helped a bit...This gives the basic outline as I needed. Will read in detail too.
Vanshaj
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