Greek- Eurozone Financial Crisis
Greece has been in a severe financial crisis since the end of 2009. The sovereign debt crisis in Greece over the last 5 years has crippled the economy and made it one of the most vulnerable economies in the world. Greek debt has accumulated over the past five years and many times the country has given the world economy some tense moment when it has come close to a default. It has been in recession for much of the last 6 years and has only recently come out of recession. The consumer price index shows that Greece is in deflation and demand is very weak. The following are some of the details of the financial crisis in Greece in 2015:
Greek Financial Crisis
• The sovereign debt crisis in Greece has been happening since 2010. Its current debt-to-GDP ratio is not at all favorable for the economy.
• In 2015 Greece has a new government led by a party that is perceived as anti-austerity and anti- Europe. This year a further four months extension on the bailout package was sought by Greece. Bailouts by Europe often come with strict austerity measures which have made life difficult for the common people in the country.
• Over the last few months, negotiations have been on between the new government in Greece and Europe over reforms that need to be introduced and implemented in the Greece economy. If a deal is reached regarding these reforms that need to be implemented between Greece and Europe, then Greece can get access to further economic aid and funds that will help the Greek government avoid bankruptcy for the near future.
• During the time of the elections, there was a sense of panic among the Greek people about the future of their finances. In December 2014 and January 2014, a large number of people in Greece withdrew their bank deposits due to this year and the banks encountered a liquidity problem.
• If the negotiations do not work out and Greece does not get the bailout funds, some analysts suggest that the government in Greece will run out of funds sometime in April 2015.
An anti-austerity party is negotiating terms of reforms measures with European leader who need the Greeks to show them a reform and austerity plan before they can release funds. Citizens of Europeans countries like Germany who are essentially bailing out the Greek government want strict austerity and reform path for Greece so their leaders have to keep in mind their core constituencies at home while negotiating. Hopefully there will be a deal and Greece will head in a path of economic progress.