Tag Archive: Greek Debt Crisit Explained
Greek Debt Crisis Explained: Top 5 things to know and key dates
I cannot remember the last time I didn’t write about Greece. The more the year goes on, the more and more Greece dominates the financial news. For those of you who are finding the time to read up about it, well done. For those of you who have begun to lose interest and patience (along with the fulcrum of the IMF), never fear, I’m going to quickly reiterate all the vital stats and most importantly the key dates coming up. So onto the Greek Debt Crisis Explained:
1) Greece’s Debt Crisis in Numbers
- Greece owe a whopping €320 Bn with €240 Bn coming from European Bailout.
- Currently, Greece’s debt to GDP (Gross Domestic Product) is currently at approximately 177%. Since 2010, GDP has fallen nearly 25% & Greek unemployment stands at around 26%.
2) Greek Debt Crisis Explained: June, July & August
- In June Greece owe €6.74 Bn : 1.5 Bn to the IMF & 5.2 Bn in Short Term Bills
- In July Greece owe €5.95 Bn : 452 m to the IMF, 2 Bn in Short Term Bills, 3.5 Bn to the ECB
- In August Greece owe €4.38 Bn: 176 m to the IMF, 1 Bn n Short Term Bills, 3.2 Bn to the ECB
3) Tsipras Rhetoric
Tsipras has backed himself into an ever shrinking corner. He was elected as a combatant to the austerity measures and he hasn’t shied away from playing the political game on a grand scale. Over the last few weeks he has begun to strike harder at the IMF, ECB and pretty much any of the creditors. Recently, after talks failed in Brussles he told creditors to get “realistic” about the cuts and mounting debt facing Greece.
“We will patiently wait until creditors turn to realism. We have no right to bury the European democracy in the land where it was born.”
4) Greek Debt Crisis Explained: Key Dates
- 16th/17th June: ECB to have an emergency meeting to discuss support for Greek banks in the event of a default
- 18th June: Eurozone ministers meeting – Deadline to reach a deal
- 30th June: European bailout for Greece ends & deadline for Greek €1.5bn debt repayment to the IMF
For more information, view this graphic designed by the Wall Street Journal of Greece’s Debt Due in 2015.
5) What is Default and Why Should we Fear it?
In essence defaulting is the failure to pay interest or the principal due on a certain date. In simple terms, it is a failure to make the legal obligation of debt repayment. By defaulting on a repayment as an individual, your credit rating is likely to depreciate making future lending either impossible or very expensive. You may even run the risk of bailiffs and court orders, who may freeze assets and claim them as partial payment. For a country it is unknown how the international community and its creditors would try to reclaim the money owed.
Default ought to be feared. It is the unknown. It has already been causing great uncertainty in the financial markets. If Greece default, it is a mere confirmation that non-existent paper money is exactly that: just inconsequential numbers on a screen. Like playing the computer game Sims or Civilization, with the cheats on. Except this is real life and a hell of lot of reality is at stake. Livelihoods and the potential onset of another recession is that reality.
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Article by Michael Cooper