Greece's debt.

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Today in the news more and more often referred to the external debt of Greece.And they talk about it in the context of the debt crisis and a possible default of the state.But not all our fellow citizens aware of what constitutes this phenomenon, what are its preconditions, and what it might entail consequences not only for this small country, but for the whole of Europe.On this and discuss in this article.

Background

Today, the external debt of Greece more than 320 billion. Euros.This is a huge sum.But how did it happen that this small country has been able to owe so much money?The debt crisis in Greece began in 2010, becoming part of the same economic phenomenon in Europe.

reasons for this situation are manifold.So, on the one hand, it is a regular doctored statistics and data on the economy by the government since the issuance of the euro in Greece.In addition, the public debt of Greece became prohibitive due to rise in 2007 broke the world economic crisis.The economy of this country also proved to be particularly sensitive to changes, because in many respects it depends on the service sector, namely tourism.

first concerns among investors appeared in 2009.Then it became clear that Greece's debt increases very serious and alarming rate.So, for example, while in 1999 this figure amounted to 94% of GDP, and in 2009 reached the level of 129%.Every year it increases by a very significant amount, which is many times higher than the average for other countries in the Eurozone.This led to a crisis of confidence, which could have a positive impact on the inflow of investments in Greece and the growth of its GDP.

par with that for many years was the country's budget deficit.As a result, Greece was forced to take out new loans, which only increases its national debt.At the same time somehow regulate the situation by higher inflation as the government can not, because it does not has its own currency, and hence can not be simply to reprint the required amount of money.

Help EU

In order to avoid the prospect of bankruptcy, in 2010 the Greek government was forced to ask for help from other EU member states.A few days later due to the increased risk of default rating of state bonds of the Hellenic Republic has been downgraded to "junk" level.This has led to a serious drop in the euro, and the collapse of the stock market around the world.

As a result, the EU decided to allocate aid to Greece tranche of $ 34 billion. Euro.

Conditions Help

However, the production of the first tranche of the country was possible only if a number of conditions.Here are the three main ones:

  • implementation of structural reforms;
  • the introduction of austerity measures in order to restore fiscal balance;
  • ending in 2015, the privatization of state.assets amounting to 50 billion. Euro.

The second package of financial assistance, the amount of which is about 130 billion., Was granted under an obligation to conduct further austerity measures.

In 2010, the beginning of the Greek government to implement these conditions, which resulted in a wave of mass protests by residents.

government crisis in 2012, in May, the Greek parliamentary elections were held.However, the parties failed to form a coalition government, as representatives of the left radical forces were not going to make concessions, and were opposed to the austerity measures proposed by the European Union.It failed to form a government only after repeated elections, in June 2012.

coming to power of the party SYRIZA

As a result of that formed in 2012. Two years later, the parliament failed to elect the country's president, he was dismissed.Therefore, in January 2015 held a special election, the results of which brought to power a party SYRIZA, led by a young and ambitious politician - Alexis Tsipras.Party managed to gain 36% of votes, which ensured it 149 out of 300 parliamentary seats.In coalition with SYRIZA included members of PASOK, the party of "eco green" and representatives of the radical left.The main point of the election program of Tsipras and his associates was the refusal to sign new loan agreements with the European Union and the abolition of the austerity measures.It is this party received such strong support from the people of Greece, whose members are tired of paying for the mistakes of previous governments.

external debt of Greece and the state of the country today

If a significant part of the population of the Hellenic Republic was pleased to come to power SYRIZA with its program to reduce dependence on loans to the EU and the abolition of the policy of austerity, which somehow touched absolutely every citizen, theEU accepted the news without much enthusiasm.So, Tsipras simply demanded to write off the state.Greece's debt to foreign creditors.With such a position neither the EU nor the IMF will not agree.For the past six months, regularly occasion of the meeting at the highest level, the purpose of which is to develop an action plan that would satisfy both sides.But so far failed to reach a compromise.

situation has recently worsened due to the fact that until June 30, Greece must repay the IMF loan payment of $ 1.6 billion. Euros.But if the country will not receive the next tranche of the loan in the amount of 7.2 billion. Euros, she just did not have the money to repay the amount.However, during the meeting held on June 18 to provide additional assistance to her it was denied.Recall that today the debt of Greece more than 320 billion. Euros.

Thus, today the country was on the verge of default.In addition, already for a long time there is talk of a possible Greek exit from the Eurozone, as well as the introduction in the State of the currency, which will be in circulation in parallel with the euro.Anyway, the situation in the country negatively affects the state of the entire European Union.