Greek government employees during a protest
European leaders reached an agreement with Greece in late October to help prevent it from going bankrupt. The European Commission, European Central Bank (ECB), and International Monetary Fund (IMF) announced the deal, which amounts to a second bailout for the distressed southern European nation. Greece will receive around 110 billion euros ($152.11 billion) in loans from countries within the eurozone and from the IMF. Banks agreed to write off 50 percent of the face value of their Greek debt—meaning they would demand repayment of just half their original loans.
The Greek government has already implemented austerity measures including tax hikes and pension and salary cuts for public-sector employees. Now Greeks will have to tighten their belts further. So far, such measures have failed to reduce significantly the country’s huge budget deficit, and most investors have lost confidence in Greece’s ability to repay its debts. With the government unable to secure financing, the Greek economy has shrunk by 5.5 percent this year. The Greek finance minister warned that the present “difficult situation” was necessary in order to prevent the “catastrophe” that would result from a default.
Earlier in October, as the Greek parliament passed austerity measures, youths rioted in Athens, clashing with police during a massive antigovernment protest. Police used tear gas and stun grenades in response, and demonstrators set up burning barricades in the streets and occupied government buildings. Fifty police were injured, as well as a few protesters.
The goal of the bailout is to prop up the Greek economy, reassure financial markets, and prevent the spread of woes to other debt-laden European economies like Spain and Italy. The common currency union, which includes Greece and 15 and other European nations that share the euro, is under severe strain. A default by Greece could cause severe disruptions to the economies of France and Germany, whose banks hold billions in Greek debt.
For more, see “Greek Debt Crisis Threatens Stability of Euro.”
Image credit: LOUISA GOULIAMAKI/AFP/Getty Images
Related Links
- Eurozone Crisis Explained
Find breaking news on the Greek debt crisis, as well as background, context, and perspective here.
(Source: BBC News, October 27, 2011) - Greece
Review the developing Greek debt crisis, basic facts about the eurozone, and details of the new deal to help Greece avoid default.
(Source: New York Times; accessed October 28, 2011) - It’s All Connected: An Overview of the Euro Crisis
To better understand the European debt crisis and the relationships between national economies check out this interactive graphic.
(Source: New York Times, October 22, 2011) - Greece: Riots as Austerity Steps Get 1st Approval
Read about the riots that erupted against austerity measures, as Greece’s debt crisis worsened in October.
(Source: Associated Press, October 19, 2011)
Good luke paying that detped
you spelt luck wrong
SPELT????
you spelled “spelled” wrong
Wow
Greeks have 700 thousand polpee working directly or indirectly thru the system. 700.000*1500euros*12=12 billion euros * 10 years = 120 billions + interest = 150-200 billions. Thats why they are in debt. Because they were not making money. They didnt produced many things. There is also a huge corruption between the ordinary polpee (when you buy a souvlaki they dont give you a receipt so the state doesnt take 20% ). And if you calculate all that, you can easily see that its 100% greeks fault.
The reason why euro-zone crietouns and even non euro-zone crietouns such as my home country the UK are ploughing so much money into the euro is simple, if the euro crashes then basically everyone is fucked because it would be so expensive to recover from the euro crashing, because basically every economy is interlocked(especially in europe) and a collapse of one economy would start a domino affect on the rest of europe this however is in it’s extremely simplest form.
really?
wow you guys can’t spell
mAN I DIDNT UNDERSTAND NOTHING OF THIS STORY U GUYS SHOUKD PUT A NEW ONE THANK YOU 🙂
i would under stand wat u guys are fighting for
Hope Greece can repay their debts…
the goverment needs to give us our jobs back. and learn how to spell.
You spelled “government” wrong.
fat people rule
trying 2 pop up Greek economy
everybody that wrote on here smacked
Hopefully everything goes well for Greece.
It will go well for Greece if the President will Listen to his People.
In the end we were all people of Greece ether slaves or Warriors.
this is dumb thats there faught they should of never wasted there money
Why Germany is not in such a debt? Or Britain? Or Norway? Because they have healthy eystsm, healthy mentality and working mentality not the lazy, greedy, corrupted greek/balkan one. Thats why Greece should be banned from EU to learn the lesson > you cannot take somebodys money and then accuse the wealthy bankers because they gave you the money. Now they make the same mistake > they take money to repay the loans interest. Its all crap
thanks alot greese
i luv these comments
. . .
Are you serious? Here the ppeole take pills to be able to continue working. I see it all the time, ppeole are breaking down because they work to much to pay bullshit they don’t need. I don’t know it what kind of business you are, but real Jobs kill most of the ppeole, because of cutoffs. Do you know how many nurses work in 1 infirmary? 2 ! They have to take care of 30-50 annoying sick ppeole by theirselfes. By the way, germany is in such a debt. if i am right its about -1.5b
The IMF specializes in amikng loans that can’t be repaid. They use our money to make the loan. Then when it can’t be repaid, they go in and force the country to allow banks and corporations to plunder their assets and natural resources. So this guy is right, the loan is probably really a gift’, at least as far as the US taxpayer is concerned. Read Confessions of an Economic Hitman to learn more about this.