The on again, off again economic crisis in Greece may be approaching the “on” stage once again.
As more problems approach, the International Monetary Fund (IMF) is said to be hesitant about helping Greece again with bailout funds.
The main concern of the IMF is that Greece’s debt burden is simply too high, and unless the Europe Union agrees to debt-reduction for Greece, the economy will simply never recover.
That has been the case so far, as each subsequent bailout has come with conditions (tax increases and tax cuts), which have shrunk the Greek economy and made any effort to reduce their debt-to-GDP ratio nearly impossible.
Greece must repay 7 billion Euros in July, and they may not have the money without a new bailout. It’s a vicious cycle, which shows no signs of stopping.
The European Union is the problem
The real issue behind the Greek debt crisis is the European Union. Without control of their own currency, Greece is unable to reduce their debt through inflation, and their exports are sold at the same price as Germany’s, which puts Greece at a massive disadvantage.
Greece would be better off leaving the EU, regaining their own currency, and struggling on their own terms, rather than being kept in the desperate and subservient position of begging the EU and IMF for more money.
Spencer Fernando[widget id="top-posts-5"]