Greece Economy

Greece - Journal Report

Source: Nytimes. (2012, January 23). Retrieved from http://topics.nytimes.com/top/news/international/countriesandterritories/greece/index.html

Greece - economic trials and tribulations

"Will the Euro survive Greece's economic disaster?"

Introduction

What steps have Greek officials taken to cut spending over the course of the last 2 years? Has the European Union taken necessary measures to assist Greece in rebuilding it's economy? The following information is supported by a New York Times article concerning Greece and their economic position, updated as of January 23, 2012. Will the consequences of the debts acquired by Greece affect the whole world economy on catostrphic levels?

Trends

According to the New York times, in the very end of 2009 Greece slipped into a debt that threatened not only the success of the euro, but the future of Europes own economic stability. In attempts to bail out Greece out of it's financial issues, Europe gave an aid package of $152.6 billion in May of 2010. Greek officials attempted to make spending cuts although they continued to miss deficit targets in 2011. The economy continued to sink 5.5 percent that year. In October of 2011 Greek demonstrators turned violent in the streets as investors demanded high interest rates from Greek borrowers. It was determined that a defealt was invetiable within their disasterous market. Again, European leaders attempted to assist them with a temporary fix when banks agreed to take a 50 percent loss on loans, although this plan would only bring down debt 120 percent of their GDP by 2020. Months of protests have gone by, and November of 2011 a new prime minister was named - a respected economist, and vice president of the European Central Bank, Lucas Papademos. By the begining of 2012 it is clear that situation is not getting better, but worse.

Conclusion

Greece's government is not currently taking measure to reduce spending where necessary, as well as where they have agreed to reduce spending in 2010 loan agreements. If there is not a plan put into action that will help Greece overcome their debt crisis, the Euro itself may collapse, affecting the whole worlds economy.