Bailout Greece 's Request For A 30 Billion Eurodollar Program

The Troika, made up of the International Monetary Fund, European Commissions and the European Central Bank have the most to lose in this debt crisis as they own 78% of Greek debt. With so much to lose we have seen European “bailout” agreements that mostly front the Greek government more money coupled with crippling austerity in an effort to “rebuild” the economy. Austerity discourages growth as it cuts the spending of the government who is by far the biggest spender in the economy. The effects of austerity can be devastating, but the true effects are often hidden beneath the messages we get from mainstream news sources. The stereotype of the Greek people as lazy and tax evading has desensitized the public and has made austerity seem like more of a sensible option. The media messages have made strict austerity measures seem justified and in effect have hegemozined the Greek people.

There are many examples of IMF projects that resulted in failure in recent years. Brazil, Argentina, Turkey, Korea, and Indonesia are just a few examples, and now we can add Greece to the list. The IMF invested in Greece in 2010 and in 2013, the IMF openly recognized that they misjudged the effect austerity would have on the Greek economy (Elliot, L., Inman, P., & Smith, H., 2013). They issued a report that identified 'Notable failures ' that include "failure in restoring market confidence, the banks’ 30 percent loss in deposits, high unemployment, waiting too long to restructure the nation’s debt, and a deepening of the recession" (IMF recognizes 'notable failures ' in Greek bailout, 2013).

The European Commission, European Central Bank, and IMF have responded to the continuing Greek debt crisis by insisting that the Greek government continue to impose and expand policy measures that failed during the Great Depression and resulted in a more than 30% drop in Greek GDP since the beginning of the recession. Continuing to impose these measures is the price levied on Greece for obtaining loans required to keep the country “open for business” and to keep its banking system from collapsing. Identify the policy measures and explain the how they pushed the Greek economy into a full-blown

One way is to reform the tax code by doubling the taxes on agriculture seems how there is so much of it. Another solution is a 3 year plan to recapitalize the banks and to merge social security funds is a slight step down the right path. As the government is working to help lessen the issue, Greek parliament brings up other measures that Greece has to deal with to bring in another bailout loan, “It must reduce incentives for early retirement, and raise worker contributions into the pension system.” (Amadeo, 6). Greek people will need to adjust even more to all the changes being made to start the debt

The roots of Greece’s economic problems extend deep down into the recesses of history. After the government dropped the drachma for the euro in 2001, the economy started to grow by an average of 4% annually, almost twice the European Union average. Interest rates were low, unemployment was dropping, and trade was at an all-time high. However, these promising indicators masked horrible fiscal governance, growing government debt and declining current account balances. Greece was banking on the rapid economic growth to build upwards on highly unstable foundations. In 2008, the inevitable happened – the Greek debt crisis.

The economic crisis of 2008 in New York had ripple effects around the world, causing deep structural problems within the European Union to crumble the economies of several countries. These countries, known as the PIGS, are made up of Portugal, Ireland, Greece, and Spain, and collectively hold most of the sovereign debt problems of the European Union. After fast growth early in the decade, these countries were spending too much money and not securing their own banking sectors with enough capital. Soon, the debt the PIGS owed caused massive problems throughout the EU, and Germany and France had to come to the rescue of these poorly managed countries. (Greek Crisis Timeline, 1) Now, in 2012, the issue has yet to be fully resolved. Greece is still sinking, and a massive bailout for Greece's banks is required. The debate is whether Germany should continue bailing out Greece and collecting interest on its loans, or whether Greece should try to separate itself from the broader European Union, in an attempt to manage its own finances and declare bankruptcy in order to save itself from crippling interest payments. Each path offers an escape from the present situation that Greece finds itself in, but only the path of bailout results in a harmonious European Union. If Greece fragments off from the EU, then the entire union is weakened as a result. I believe that Greece should accept the terms of the bailout that Germany has provided, and should undergo several years

During this time period the IMF took on a new role of lending to countries on the brink of default. By the mid 1980s, some observers noted that the loan qualifying austerity policies implemented by many borrowers were prolonging and deepening the debtor nations’ problems.

The government of Greece set a series of plans for this problem and finally choose one of cutting the deficit. But the Bond markets doubt about the plan, therefore, Fitch and S&P, cut Greece’ grade from A- to BBB+.

dirty gloves"Another sign of plummeting living standards is the growing number of people unable to pay rising taxes and utility bills. With arrears to the state growing by the billions of euros and the deepening recession, all the best-laid plans to put the Greek economy back on track are at risk. Analysts fear an unending cycle of more cutbacks and tax

In 1999, ten European nations joined together to create an economic and monetary union known as the Eurozone. Countries, such as Germany, have thrived with the euro but nations, like Greece, have deteriorated since its adoption of the euro in 2001. The Eurozone was created in 1999 and currently consists of eighteen European nations united under the European Central Bank and all use the euro. The Eurozone has a one point six percent inflation rate and an eleven point six percent unemployment rate in 2014. Greece joined the Eurozone in 2001 and was the poorest European Union member at the time with a two point six percent inflation rate3 (James, 2000). Greece had a long economic history before joining the Eurozone. The economy flourished from 1960 to 1970 with low inflation and modernization and industrialization occurring. The market crash in the late 1970’s led Greece into a state of recession that the nation is still struggling with. Military failures, the PASOK party and the introduction of the euro have further tarnished Greece’s economic stability. The nation struggles with lack of competitiveness, high deficit, and inflation. Greece has many options like bailouts, rescue packages, and PPP to help dig it out of this recession. The best option is to abandon the Eurozone and go back to the drachma. Greece’s inflation and deficit are increasing more and more and loans and bailouts have not worked in the past. Leaving the Eurozone will allow Greece to restructure and rebuild

Due to the confines of the Eurozone 's monetary policy, Greece and several other countries were unable to ease the effects of the crisis through independent monetary policy. The consequences were large government debts amounting to €323 billion1 in Greece alone.

However, in 2009, Greece started to hit the crisis as it is indebted heavily to eurozone countries and become one of three eurozone countries that have gone under two bail-out. Although the Greek economy is relatively small with direct damage of it defaulting on its debts may be soaked up by the eurozone (Financial Times, 2012). The need of financial support from EU and the IMF was requested in 2010 as a loan of 45bn. According to Carmen Reinhart - Co-author of This Time is Different; she believed that it was difficult for Greece to get out of the crisis without restructuring. The problem of the Greek crisis is involved with fiscal problems, which can be income problem, profiling problem, servicing problem or balance sheet problem. As the government took benefit from the growth, they ran a large structural deficit. The restructuring happens more slowly with the support from the EU and IMF, therefore, the private bank from France, Switzerland, etc. which gave a loan to Greece, are not distressed with a huge haircut. As a result, Greece owned the IMF 28bn Euros, the EU 74bn Euros and had a market debt of 262 bn Euros, according to JP Morgan. From 2000 to 2008, the Greek budget deficit was 5.1% as a real number instead of 2.9% of GDP (Marzinotto et al. 2010). In 2009, George Papandreou won the election with his promise of spending more on social causes and trying to reduce the loan that Greece faced. A short time

Although a commonly accepted view is that the hidden budget deficit in Greece is the beginning of the European sovereign debt crisis, the real causes of this economic crisis can be various. To reveal the whole event, a comprehensive review of the background is

Ever since the end of 2009, Greece has been involved in a financial and economic crisis that has been record breaking and shattered world records in terms of its severity and worldwide effects. The Greek government, since the beginning of the crisis, has attempted to take several governmental measures to try and “stop the bleeding,” including economy policy changes, dramatic government spending and budget cuts and the implementation of new taxes for citizens. In addition to this, the government has tried to alter the perceptions of Greek government and economy by the rest of the world in an effort to appear both more liberal and more democratic. Greece has also been working to privatize many previous

In 2010, the country of Greece experienced one of the worst financial crises in modern history. During this time, The IMF wanted to be involved with the financial support package that Greece (and other countries in the Eurozone) would receive. That same year, French President Nikolas Sarkozy stated “I will never allow the IMF in Europe” (http://www.reuters.com/investigates/special-report/imf-greece/). Despite this remark,