It could be called one of the world’s sharpest two-edged swords: whether to bail Greece out of its debt crisis and ease its financial woes, or leave the country to its own devices and let the chips fall where they may. Unfortunately, the trouble with the latter school of thought is that the remainder of the European countries are likely to end up dealing with their own troubles of an influx of migrants, continued terrorist threats, and whatever fallout would become theirs if Greece continues on the road to crisis.
In June 2016, the Board of Directors of the European Stability Mechanism (ESM) authorized a bailout package of 7.5 billion euros, or $8.4 billion, for Greece to keep paying its bills. The country also received pledges of additional aid, which had the effect of easing concerns over a continuing financial crisis.
This band-aid treatment was not without its detractors, namely Germany, which has stood in opposition to any bailouts until Greece makes serious and often painful changes. By contrast, however, the International Monetary Fund (IMF) holds the position that Greece cannot make changes without debt relief.
To Each His Own
A huge stumbling block to any kind of Greek debt relief–or aid of any kind–is a flaw in the euro system that many economists have argued about since the beginning of the EU concept, the idea that although the EU is banded together in terms of their monetary system when it comes to many of the sensitive matters of state, each of the 28 member countries are beholden to their own voters and taxpayers, and nobody else. This causes huge problems when member countries have their own interests to serve in terms of management, but must work with the other members to spend the money. All of these monies are overseen by the European Central Bank.
Ever since the Greek debt crisis started in 2010, most investors in Greek bonds have sold their interests, making them no longer vulnerable to what happens in Greece as the crisis continues. If there is a silver lining to this dark financial cloud, it’s the fact that other countries such as Spain, Portugal, and Ireland took the opportunity to restructure their economies, making them less vulnerable to the situation that Greece had come to find itself in.
Europe has felt the effects of post-Brexit events following economic slowdown, refugee crisis, and political disintegration that have hit the nation below the belt. However, Greece has also been the most affected to the point that the country hit the headlines last summer with news that it was experiencing unstable political environment and economic meltdown.
One year later, Greece finally receives its third bailout ($96.1 Billion) from its lenders as a result of rigorous negotiations between the two parties. But this has resulted in more citizens suffering, while others trying to stay positive about the situation and probably make something out of it.
Since the government of Greece received their first, second and now third bailout, it has been forced to take extreme measures aimed at cutting down on national spending. As a result, people have been affected so severely that unemployment rates are rising beyond the normal and affecting all ages across the country.
What analysts have since reported concerning Greece’s current situation
DiaNEOsis released a report back in June and it depicted many Greeks struggling just to get by. The population currently stands at 11 million people. The same report revealed that the country was facing extreme poverty which was at 2.2% in 2009 and now 15% in 2015. This survey sampled some 1,300 individuals before arriving at a conclusion. The situation has caused some 1.6 million people to live below the extreme poverty line.
The effects of this economic slowdown on the Greece’s population in general
The effects of extreme poverty can be felt, both at the local and national level as well. As a result, this has caused many citizens to retreat the battle and only seek to fend for their families’ survival.
There is also widespread animosity between people. There seem to be some form of anger that is not directed to anyone in particular.