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Over the last decade, Greece went on a debt binge that came crashing to an end in late 2009, provoking an economic crisis that has decimated the country’s economy, brought down a government, unleashed increasing social unrest and threatened both Europe’s recovery and the future of the euro. The debt crisis, sparked by years of overspending and waste, has left Greece relying on funds from international rescue loans since May 2010. Austerity measures including repeated salary and pension cuts and tax hikes have led to record unemployment with more than 1 million people out of work, a fifth of the labour force.
The International Monetary Fund on Thursday approved a second rescue loan for debt-riddled Greece, joining the European Union again in an attempt to save the country from bankruptcy. The IMF executive board authorised a four-year, 28 billion euro ($36.7 billion) loan for Greece "in support of the authorities' economic adjustment program," the global lender announced. "Greece has made tremendous efforts to implement wide-ranging painful measures over the past two years, in the midst of a deep economic recession and a difficult social environment," IMF managing director Christine Lagarde said in a statement.
However, the challenges confronting Greece remain significant, with a large competitiveness gap, a high level of public debt, and an undercapitalized banking system. The new Fund-supported program "will enable Greece to address these challenges while remaining in the euro zone," Lagarde said. The IMF loan approval came days after euro zone ministers signed off on their part of a huge 237 billion euro rescue plan for Greece, that combines 130 billion euros in new financing and 107 billion euros of debt reduction by the private sector.
The International Monetary Fund on Thursday approved a second rescue loan for debt-riddled Greece, joining the European Union again in an attempt to save the country from bankruptcy. The IMF executive board authorised a four-year, 28 billion euro ($36.7 billion) loan for Greece "in support of the authorities' economic adjustment program," the global lender announced. "Greece has made tremendous efforts to implement wide-ranging painful measures over the past two years, in the midst of a deep economic recession and a difficult social environment," IMF managing director Christine Lagarde said in a statement.
However, the challenges confronting Greece remain significant, with a large competitiveness gap, a high level of public debt, and an undercapitalized banking system. The new Fund-supported program "will enable Greece to address these challenges while remaining in the euro zone," Lagarde said. The IMF loan approval came days after euro zone ministers signed off on their part of a huge 237 billion euro rescue plan for Greece, that combines 130 billion euros in new financing and 107 billion euros of debt reduction by the private sector.
The Greek economy was expected to exit recession only in 2014, not 2013 as forecast in December. But with gross domestic product growth in the low digits beginning in 2014, Greece's public debt would be on track to meet the loan program's debt-to-GDP benchmark of below 120 percent by 2020. The IMF projected debt would fall from 163 percent this year to 117 percent in 2020.
But with the support of the IMF, the EU and private creditors, Greece can overcome its debt problems and get its economy on the recovery track. The the challenge here is that Greece would it manage to run the billions that they loan or the history of 2010 will repeat itself. The Greek politicians are hoping to arrive at a solution by Sunday night, so the country can attend a meeting of euro zone finance ministers in Brussels Monday with a semblance of stability. So let us wait for the feedback and stay posted. http://thechronicleherald.ca/business/71863-greece-staves-bankruptcy-biggest-debt-deal-history
They can overcome this bankruptcy if they can have a strategy on how to get out of that debts and make sure that this crisis wont happen again because this situation harms the reputation of the Euro country and that leads to a higher Tax pay so as to repay their debts.People also become unemployed because they wont have money to pay their Salaries and it left lots of Greece people homeless, so what is their take on that?
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ReplyDeleteGreece has learned their lesson in a hard way, so i believe that now they will manage their money in a good way and they will manage to be out of debts before 2020.
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