As someone who considers myself mildly interested in but only vaguely updated on some world issues, I finally decided to learn a little bit more about what exactly is going on with the Greek financial crisis. And, I pretty much found out that I'm a few years late to learning about it all. Yikes?
Since it's a pretty big week in regards to this crisis (as Greece's official bailout ends on Tuesday), I thought I'd share what I've learned for those other curious people who haven't had the time to catch up.
Here's a quick overview WHY Greece has so much debt. Basically, Greece seems to be on it's way to bankruptcy is something big doesn't change, and it seems likely that they might ultimately need to leave the Eurozone. It's been a problem a long time coming, but it's a complicated issue, and the changes that have been made haven't been able to fix it. It's not as simple as saying "the government spends too much," though.
But, it's really, really not the end of the world for Greece. Countries have been in serious debt or even face bankruptcy before, and it will happen again. The sensationalism and over-dramatizing in the coverage of the crisis, however, are really not helping the perception of the problems.
According to Mashable, there are five things that you should really know about the crisis:
1. Greek politicians don't want to listen to those that are lending them bailout money. The money is being given with strict terms that tell them to higher taxes/lower goverment payouts, which is something the politicians are against and refuse to do. Some of these suggestions by the international lenders are things like higher the retirement age by 6 years and increasing taxes dramatically.
2. The money owed isn't that much (in the grand scheme of money changing hands in the world....) but Greece is really, really broke. Like, really broke. ATMs and banks are being closed Monday, and maybe for the week, and Greece has even more debts due this summer.
3. Things just got worse. Greece cut off talks with the EU about the problem on June 26th and declared that a public referendum held on July 5th will decide how to continue. They also asked for an extension on when the money is owed until then (which was denied) so it will be interesting to see how this continues.
4. Greece needs the bailout, as they really have no other options, so something is going to have to give--either them into the demands of others, or vice-versa. The EU actually can't afford to lose Greece because it will destablize the Euro, and the EU already has it's fair share of debt problems which would take a whole different card to explain.
5. It's getting worse as people take their money out. While I saw some Greeks on reddit saying that the day to day hasn't changed much for them, it's clear by the lines are ATMs that people are trying to take as much of their money out of banks as possible, and since Greece has no money, this emergency money is being provided by outside loaners as well. There are caps on how much can be taken out of ATMs as well.
I still don't know that I truly understand what is happening, but I think much is up in the air as this week begins. We'll have to see what happens as the banks (don't) open on Monday and negotiations (don't) continue between the EU and Greece.
Here's to hoping a solution can be found that is favorable to all!