There are several famous Hollywood movies in which the power of GREECE and the GREEK GODS has been shown. It is a well known fact that Greece had been a prosperous nation from the Stone Age and still going strong in the modern world. But from the past 5 years there have been some problems with GREECE.
So what exactly the problem is? What GREEK Crisis is?
Currently Greece is in a terrible Economic, Financial and Political trouble- banks are closed, ATM’s are not working, people are on streets, Unemployment at its peak, neighboring European nations are turning against, lack of support from International community ,so in short a blunder. The worst conditions for a GOD nation.
Here are some brief points of the crisis in Greece:
1. Greece defaulted on debt payment of $1.7 billion to IMF.
2. Greece current unemployment rate is 25.6 %.
3. Voters in Greece rejected on 05 July 2015 the terms of a bailout deal offered by international creditors in June.
4. Greece’s pension system gets over 50% of its revenue from the state budget and with only four working people for every three pensioners in Greece, the revenue is declining.
But how Greece reached at this point?
Greece became the center of Europe’s debt crisis after Wall Street exploded in 2008. With global financial markets still recovering, Greece raised alarms in October 2009 about the soundness of Greek finances.
Suddenly, Greece was shut out from borrowing in the financial markets. By the spring of 2010, it was moving toward bankruptcy, which threatened to set off a new crisis similar on the verge of Lehman brother’s crisis .
To avert calamity the International Monetary Fund, the European Central Bank and the European Commission issued the first of two international bailouts for Greece, which eventually total more than 240 billion Euros.
The bailouts came with conditions. Lenders imposed harsh austerity terms for Greece which required deep budget cuts and steep increase in taxes. They also required Greece to streamline the government, ending tax evasion and making Greece an easier place to do business.
But if Greece got bailout, then why still crisis persists?
The bailout money was supposed to buy Greece time to stabilize its finances and put an end to market fears that the euro union itself could break up. Although bailout helped, Greece’s economic problems haven’t gone away. The economy has shrunk by a quarter in five years, and unemployment is above 25 percent.
The bailout money mainly goes toward paying off Greece’s international loans, rather than making its way into the economy. And the government still has a staggering debt load that it cannot begin to pay down unless a recovery takes hold.
So how ‘Grexit’ will affect the world?
At the height of the debt crisis a few years ago, many experts worried that Greece’s problems would spill over to the rest of the world. If Greece defaulted on its debt and exited the eurozone, they argued, it might create global financial shocks bigger than the collapse of Lehman Brothers did.
Now, however, some people believe that if Greece were to leave the currency union, known as a “Grexit,” it wouldn’t be such a catastrophe. Europe has put up safeguards to limit the so-called financial contagion, in an effort to keep the problems from spreading to other countries. Greece, just a tiny part of the eurozone economy, could regain financial autonomy by leaving, these people contend — and the eurozone would actually be better off without a country that seems to constantly need its neighbors’ support.
How ‘Grexit’ will affect INDIA?
2. Exports from India would be impacted negatively if the European Union is hit from the Greece crisis.
3. Engineering exporters’ body EEPC India said the economic crisis in Greece will impact engineering exports from India as European Union is the largest destination for such shipments. The industry body said it sees indirect impact from the UK, Italy, Turkey and France.
4. Indian economy is not really centric to Greece directly but if European Union is impacted due to this then India could be affected.
So there might be some effects in INDIA due to ‘Grexit’ but it should not be like the 2008 Lehman brothers crisis effects which tumbled World markets to floor and shook the whole world.