It's been a year and a half since the Greek debt crisis was making headline international news. However, the EU and other international organizations' difficulty with administering aid has not gone away. Economic forecasters have estimated that the debt will rise as high as 275 percent of the Greek GDP by 2060. On February 6th the IMF will meet and discuss the issue facing the Greek economy and how laws that the Greek government can implement might make creditors more comfortable with taking on this burden. The IMF and creditors to Greece suggest that the country should implement austerity measures. However, this has not been received well by Greek officials.What policies could Greece put forth to make the country more welcoming to creditors?
It seems as though austerity measures in Greece might help make Greek debt more sustainable in the short term, but if Greece want's to improve their stagnating economy shouldn't the government spend more? Also, if increasing taxes could be a part of these austerity measures would this make a difference if the Greek people are already struggling to pay the taxes they already have?
4 comments:
It will be interesting to see how the IMF attempts to curb the Greek debt crisis and Greece's response. It will also be interesting to see what Greece is willing to do to get their economy back up to par with the rest of the EU. Austerity measures seem like they might help as restructuring and decreased spending might save money however, the full picture is never known and it will be interesting to see how it plays out.
Greece is trapped in a cyclical mess. The government does not have the revenue to stimulate the economy and the economy is not strong enough to generate revenue and the EU, IMF and other international loans can only keep them going for so long. Two years ago during the referendum, when the new drachmas were proposed I thought that the Greek government could actually do what the Germans with their new Deutsche marks after WWII during the spiraling inflation, but given how they misled everyone to believing they were in less debt than they actually were, it would be hard to trust the government to pull off that kind of a reform.
Germany and France can carry forward the EU economy for so long, let's hope that PIGS economic failures do not lead to a crumbling of the entire system.
Shamayeta, I certainly agree with your opinion on larger economies in the EU growing tired of holding up countries such as Greece. I too have trouble seeing a strong future for the European trading bloc. However, if countries such as France and Germany are unwilling to put forth effort to aid Greece then we might see a crisis that can effect the Euro zone as a whole.
Definitely. I think it can be said without a doubt that the European experiment will struggle to stay put if these economies are not revived soon enough especially considering the drastic dynamics of the geopolitical situation in the region. And the refugee crisis is certainly not helping Greece either, and if right wing nationalists in Europe and North America refuse to accept refugees, Greece could be stranded with hundreds of thousands of people that they simply cannot afford to take on right now.
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