Greece has been hitting the headlines nowadays but most of us are not aware about the reason and conditions which led Greece being bankrupt. Read the blog for everything you need to know about the Greek debt crisis .
Imagine your household, you take up loan to maintain all your needs and try to payback the debt. But in case of Greece it took up a mountain load of Debt which was beyond its limit to be repaid. "Constant government borrowing to fund promises by politicians" has caused Greece's cash crunch, says David Kotok, chief investment officer at Cumberland Advisors.
Another factor which affected Greece's economy was its policy of retirement at the age of 57, for the purpose of paying out benefits. When you compare the same rule in US its 62 yrs age for retirement that means Greece has to provide extra 4 yr benefits to its people which is another burden on its economy. Tax evasion is another factor which broke the financial backbone of the country because when taxpayers dodge their duties it means less revenue for debt stuck government.
Athens was the first to come at rescue by borrowing billions of dollars from European bank to help Greece stand back but again it failed to pay back those loans which led to further increased debt burden. Investors too ran away from the investment market as the constant fear of losing the invested money stopped them from helping the market of Greece. In early 2010 when Greece was on the verge of getting bankrupt, country got its first of two international bailouts that had a total of 240 billion euros from the European central bank,the international monetary fund and the European commission called "trioika".
In the current scenario the Greek debt crisis, unemployment status of Greece is above 25% , its GDP has fallen below around 30% and by data of world bank it has a dept of around 200% of its GDP. Making no changes in its economic policy even after crisis left no hope for the country.In the current condition, Greece is using all its bailout money to payback the investors who had their money struck in the market.The unemployment rate will exponentially increase in the coming years and the people who deposited their money in banks have to wait a lot before things get back in track.
There would be far less government services available now to the civilians and new government setup could be expected soon. The biggest fear of Greece would be having its 19 nation euro membership at stake. There are high chances of having Greece to lose Euro as its currency and form a new currency. If it doesn't find more bailouts its certainly going to give more pain to its civilians.
The economy of Greece has shrunk by a quarter in the last 5 years and the money it is getting in bailouts is being used to pay its international dept.
pic source- www.nytimes.com
After knowing all that is going on within Greece lets just hope and pray that the trouble days ends as soon as possible because the only one suffering here are the innocent civilians who can't access their hard earned money.
In the comment below share all you know about the Greek crisis and lets make this discussion a learning place for everyone. And don't forget to share it as much as you can to let others know about the situation there.
Reach me at - rahulshahi.1995@gmail.com for any query or suggestion.
Imagine your household, you take up loan to maintain all your needs and try to payback the debt. But in case of Greece it took up a mountain load of Debt which was beyond its limit to be repaid. "Constant government borrowing to fund promises by politicians" has caused Greece's cash crunch, says David Kotok, chief investment officer at Cumberland Advisors.
Another factor which affected Greece's economy was its policy of retirement at the age of 57, for the purpose of paying out benefits. When you compare the same rule in US its 62 yrs age for retirement that means Greece has to provide extra 4 yr benefits to its people which is another burden on its economy. Tax evasion is another factor which broke the financial backbone of the country because when taxpayers dodge their duties it means less revenue for debt stuck government.
Athens was the first to come at rescue by borrowing billions of dollars from European bank to help Greece stand back but again it failed to pay back those loans which led to further increased debt burden. Investors too ran away from the investment market as the constant fear of losing the invested money stopped them from helping the market of Greece. In early 2010 when Greece was on the verge of getting bankrupt, country got its first of two international bailouts that had a total of 240 billion euros from the European central bank,the international monetary fund and the European commission called "trioika".
In the current scenario the Greek debt crisis, unemployment status of Greece is above 25% , its GDP has fallen below around 30% and by data of world bank it has a dept of around 200% of its GDP. Making no changes in its economic policy even after crisis left no hope for the country.In the current condition, Greece is using all its bailout money to payback the investors who had their money struck in the market.The unemployment rate will exponentially increase in the coming years and the people who deposited their money in banks have to wait a lot before things get back in track.
There would be far less government services available now to the civilians and new government setup could be expected soon. The biggest fear of Greece would be having its 19 nation euro membership at stake. There are high chances of having Greece to lose Euro as its currency and form a new currency. If it doesn't find more bailouts its certainly going to give more pain to its civilians.
The economy of Greece has shrunk by a quarter in the last 5 years and the money it is getting in bailouts is being used to pay its international dept.
pic source- www.nytimes.com
After knowing all that is going on within Greece lets just hope and pray that the trouble days ends as soon as possible because the only one suffering here are the innocent civilians who can't access their hard earned money.
In the comment below share all you know about the Greek crisis and lets make this discussion a learning place for everyone. And don't forget to share it as much as you can to let others know about the situation there.
Reach me at - rahulshahi.1995@gmail.com for any query or suggestion.
