Why the Greek economy got collapsed and how other countries look into it for better relationship with Greece? Is there any future for Greece even if they pay all of their debts for better economic growth?
Greece is well-known for its historical discoveries and theories that are very much related to modern mathematics and physics. However, in present their economy is on the brink of collapse. High unemployment rate and increase in the fiscal deficit are major concerns for their crisis.
Greece wasn’t in this situation until international recession hit all across the world in 2009. Since, then the economy of Greece is unstable and today it is on the brink of collapse.
Greece Economy was very much stable and growing positively until the military coup happened in mid 1970’s. This coup not only brought slump in the governance but also their economy was hugely devastated. The chaos and violence resulted in loss of government properties as well as their GDP was highly affected.
Most of the people lost their jobs because of this reason. However, in late 1990s, a breeze of happiness swayed in Greek politics when they joined European Union for fiscal requirements.
The move helped Greece to have stronger ties with powerful nations of the union such as Germany and France. The economy of Greece also got stable equal to Germany and France. However, huge public spending and government borrowing brought instability in Greek economy and eventually resulted in high debt. Their spending was much higher than the average spending of other members of European Union.
When international recession occurred in 2008, Greece economy was devastated. It was reported that in 2009, Greece showed fake economic reports and statistics on debts over the past few years. Soon after, the European Union slammed Greece for false reports and statistics. This resulted a massive plunge in their economy and international relationship.
Since the recession occurred, the Greece has been on the brink of bankruptcy. Their debt is around 170% than their annual GDP. German Chancellor Angela Merkel had even slammed European Union several times, by stating ‘Greece should not have been accepted in Euro zone.’
According to several media reports, nearly US$ 320 billion needs to be paid to European Union for bailout and US$ 150 billion to European Finance Stability Facility (EFSF). EFSF is a temporary organisation created by Euro zone members to help the EU member nation at times to get rid off economic and debt crisis. Portugal and Ireland are primary recipients of EFSF earlier.
Greece needs to pay nearly US$ 60 billion to European nations Government, US$ 22 billion to Private investors of different nations and US$ 35 billion to European Banks. After all the economic aid and reforms, Greece remains in trouble.
The unemployment rate for those ages 15-25 is nearly 55 percent. Moreover, a high budget cut is among those reasons that led to many riots and protest in the country.
Meanwhile, Germany and other European governments were locked in heated disputes most of the times on whether Greece could make any financial reforms.
Germany and France, already have invested nearly US$ 150 billion in Greece, do not want to give another financial bailout to the nation. For next half a century, Greece needs to stabilize its economy and decrease government spending.
According to geopolitical experts, Greece would not be allow to go bankrupt because it will be a huge loss for other western countries including United States that may result in bitter relationships and another international recession.