Home Economy Can Greece Make Good on €1.6 billion Debt Repayment?

Can Greece Make Good on €1.6 billion Debt Repayment?

2011
28
greek crisis

Grexit Fears Spike Amid Looming Deadline

greece

Greece remains front and centre of European politics, given the exigency of the upcoming debt repayment deadline. Come Tuesday June 30, the Greek government will likely be in default unless it makes repayments to its international creditors.

High-level meetings have failed to secure agreement between the new Greek government and its European lenders. The Greeks simply refuse to make cuts to pensions, and other vital austerity measures.

Unsuccessful talks with European finance ministers have left the threat of a €1.6 billion International Monetary Fund (IMF) debt repayment crisis on the cards. The Germans have already voiced their displeasure at the direction of the talks and fears are rife that a default could severely impact a slowly recovering eurozone economy.

What’s at stake for Greece is an avalanche of bailout funds. Three international bodies must agree with the terms of debt repayment, including the IMF, the ECB and the EC. If consensus can be reached, the Greeks will receive the much needed €7.2 billion to keep the country running. The Greeks have met with EU finance ministers 5 times in a week to avoid a debt default – to no avail.

Greek Intransigence Remains a Stumbling Block

The Greek proposals are contrary to what the IMF has been advocating. The Greek offer is one which promotes tax hikes over austerity measures focused on spending reductions. The Greek economy simply cannot maintain its debt burden, and adding additional taxes will aggravate rather than alleviate the crisis.

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 Prime Minister of Greece, Alexis Tsipras
Prime Minister of Greece, Alexis Tsipras

And then there’s the internal politics of the Greek parliament. Tsipras ran on a campaign promise of no austerity, and if he attempts to back away from that a mutiny could befall his party’s rule. The latest consensus from talking heads seems to suggest that if a Grexit isn’t on the cards, Greece’s position in the Eurozone is teetering.

It is absolutely clear that a week of extreme economic and political turbulence lies ahead and the outcome is as uncertain as ever. The EU believes it can withstand the shock of a Grexit and the €320 billion of unrepaid debt held by various member states and international bodies.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

 
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William R. Feins , freelance journalist from London, UK; he received his B.A. degree in Economics and his Masters in Sociology. William has always been interested in the mechanics of business and the inspiration of original thinkers, and firmly believes that the former can’t succeed without the latter. In his spare time, he enjoys the ridiculous spectacle of watching table tennis on a big screen (preferably at a pub) and reading weighty tomes about World War II.

28 COMMENTS

  1. I believe the economy of Greece is vital to the world. That is why, it is so important to save them and the people of Greece. It is in the best interest of the world and Europe for Greece to survive and to boost their economy in my most humble opinion.

     
  2. Shocking behaviour all around. Tsipras should have started printing drachmas and preparing for a move to a new currency months ago, thus demonstrating to the EU that Greece was prepared to leave rather than face the draconian austerity that is clearly vindictive and that simply kicks the can down the road for three years, as no debt relief is being offered. It takes months to move to a new currency.

     
  3. I hope that the rest of the world can make a decision soon. If we don’t, it’d affect a lot of Europe, as well as the rest of the world as a whole. Greece played an important role in history, and we can’t just let it go.

     
  4. I think that all the European countries were getting on just fine until they brought in the Euro.This has ruined Europe as we know it.

     
  5. The Euro was a really bad idea to begin with. If you take a comparable look at a similar system for example the USA, it works because there is federal oversight for the states. A single currency for multiple nations will never work.

     
  6. Greece reminds me of the United States. It is also in big, big debt. I do hope they can secure an agreement soon. This change of currency is not a good idea. It only makes things more confusing.

     
  7. Greece’s situation should be a wake-up call to other countries as this has happened before and will of course happen again. The article remarks on this and other very troubling events happening with Greece, and we can only hope they can rebuild themselves and not plummet the economy.

     
  8. The current financial situation of Greece has been developing since the seventies, it has not happened over night. Big changes need to happen in order for the country to get back on track and gain EU’s trust again.

     
  9. If you take a comparable look at a similar system for example the USA, it works because there is federal oversight for the states. A single currency for multiple nations will never work.

     
  10. This type of thing has been going on forever and it’s never easy, never a good thing, but countries can and do make their way back from this type of situation. I hope Greece can do so – it’s a beautiful country and I’d like to see it thrive.

     
  11. A country during such a tumultuous economical state such as dear Greece – who has and had little-to-no ability to steer their own way out- clearly needed this fortuitous bailout at the expense of their neighborly brothers. This is not a means to end but more or less a mere bandage on an even larger hemorrhaging global financial
    scale. We must not ceaselessly create jobs that contribute to these states of burden, yet rather eliminate the necessary unnecessaries.

     
  12. Greece is going to default on any loan they are given because they are using these loans to pay off other loans and thus countries will stop lending them money. This is like taking out a loan from a bank to pay off your credit card. They have too many social welfare programs and are unwilling to cut any of them. It’s just a matter of time before their economy completely collapses.

     
  13. There is always a way back out of the hole of financial debt, Greece just needs to find its footing this kind of thing happened to other countries in the past and they managed the problem. i have no doubt that Greece will prevail but i believe the help of friends is needed.

     
  14. I think one way or another everyone needs to come to some sort of agreement, work on a plan, and they need to do it together, or else the entire world is going to be feeling the backlash of this even more than it already has.

     
  15. Financial debt is not something anyone needs to be in but it seems like this country will not give them a hcance to repay their debt. so I think everyone should ship in some money to help pay it all back.

     
  16. Wow, I had no idea what some of the effects of Greece failing to be bailed out would be. Very informative.

     
  17. I don’t think it will stop with Greece. Spain and Portugal will follow unless there are big changes to the structure of the Euro.

     
  18. Financial debt is for something hard to bounce back from. And if there not given them the chance or funds to be able to have resources to help. Then isn’t going to get fixed but keep becoming a bigger problem or issue. Agreed in everyone should ship in some money to help them pay it all back.

     
  19. I don’t understand why every time there is a crisis tax needs to be put up and pensions needs to be cut. what about politicians’ salaries? Same story as in Italy, Spain, Portugal. They helped Germany in the past, why can’t Germany help them? And they call it Union!!!

     
  20. The terms imposed by the ECB and IMF including the requirement to run an arbitrary primary budget surplus will cripple the Greek economy even further and make default even more likely.

     
  21. I think the EU is collapsing and something needs to be done urgently to prevent more countries from the same crises. I also think that the EU should renegotiate it’s policies especially with the UK who are seriously considering to exit the EU.

     
  22. I agree with some of the other people here commenting. Why CAN’T the salaries of politicians be cut? Why go for the pensions every, single time? You never know, however, wherever money is or isn’t being cut…hopefully Greece can crawl their way out.

     
  23. We will see what happens, but the EU policies and what the Greek Prime Minister is proposing will be a failed one. Extra tax burdens on the people and the EU way of thinking will do no one any good.

     
  24. I think it’s too early to tell what will happen in Greece, although if they are to make a turnaround, they sure need a complete overhaul of the current system. I agree that politicians’ salaries need to be cut.

     

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