B1 Intermediate US 1093 Folder Collection
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Greece is currently about 400 billion dollars in debt. That’s about 170% of their annual
Gross Domestic Product. Over the next 50 years they are scheduled to repay that debt. But
with the economy in shambles, many experts wonder if that goal is really attainable.
But how did Greece end up with so much debt in the first place? And to whom, specifically,
does Greece owe money?
Greece became somewhat politically and economically unstable back in the 1970s after an attempted
government coup. Nevertheless, after a profit spike in the 1990s, they met the fiscal requirements
to join the Eurozone, in the year 2000. This event inextricably tied Greece to stronger
economies like Germany and France, and allowed Grecians more access to low-interest loans.
So, public spending and government borrowing soared, even as Greece’s debt remained higher
than the Eurozone average in the 2000s.  When the international Recession of 2008 hit, Greece
spiraled into a debt crisis. To make matters worse, in 2009, it was revealed that Greece
had been falsifying reports on their debt for years. When the real statistics were exposed,
their national credit rating took a plunge, which in turn, caused investors to jack up
interest rates. Greece has been on the brink of bankruptcy ever since. German Chancellor
Angela Merkel later said that “[Europe] should not have accepted Greece into the eurozone”.
Out of the roughly 320 Billion Dollars in bailout money that Greece must eventually
pay back,  most of it, or about 47%, is due to the European Financial Stability Facility.
This is a temporary organization created by Eurozone members to pool money tog ether and
help stabilize member countries in crisis. Greece, Portugal and Ireland are the primary
recipients of the EFSF.
19% of Greece’s debt is held by other Eurozone Governments. Another 12% is held by private
investors. And the rest - about 22% - is held by the European Central Bank, the International
Monetary Fund and “treasury bill holders”, who are primarily Greek banks., .
Yet, after all the financial help, Greece remains in trouble. The unemployment rate
for those aged 15 to 24 is at 55%. Further, budget cuts are so unpopular that they have
led to riots and protests. Meanwhile Greece and other European Governments are locked
in heated dispute as to whether Greece should or even COULD make more financial reforms.
Germany, and France, who have invested nearly 115 Billion Dollars in the country, don’t
want to see Greece default on its debt, but they are also refusing to give Greece another
bailout.
During the next half century, Greece needs to stimulate its economy while decreasing
government spending. In the end, most experts agree that Greece will not be allowed to go
bankrupt. The financial loss for other Western countries, including the United States, would
be too great, and could potentially create another international recession.
Although it’s uncommon, and definitely not the same as with people, countries can end
up bankrupt. To learn more, make sure you check out this full video now. Thanks for
watching guys! See you all tomorrow!
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Why Does Greece Have So Much Debt?

1093 Folder Collection
James published on June 15, 2015
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