Thursday, March 25, 2010
Greece Receives a Backup Plan
This article is about the the European Union reaching an agreement on whether or not to bailout Greece. All eurozone countries (countries which have adopted the euro, which does not include every country in the European Union) have agreed that they will offer Greece loans at the market rate if Greece fails to receive loans in commercial markets. The terms of the loans will have to be agreed upon unanimously by the eurozone countries (of which there are 16). This gives all of the countries veto power if they do not agree with the loan being made. It has not been disclosed how much will be loaned, but it could be as much as 22 million euros. The article also discusses the European Unions current attempts to create stricter financial regulations for countries in order to avoid a crisis similar to the one Greece is currently experiencing. Interestingly, the article mentioned that no loans were imminent and a loan to Greece would be a last resort.
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3 comments:
It will be interesting to see what political effects this will have in countries that will be supplying more of the funds than others, such as France and Germany where these policies are already unpopular.
I agree with Kevin. It will be very interesting to me to see how Germany reacts because they are so staunchly against bailouts. It will also be interesting to see if this affects eurozone policy in the future to avoid similar circumstances.
In agreement with you both. I would like to see that if bailout money is given, if Greece will be required to make any changes in their economic policy. If I were to bailout a different country, I would like to see them make some changes to help ensure that they don't come crawling for more money down the road. There needs to be some incentive for them to use the money wisely.
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