Group A Third Subject

The Greek Financial crisis. You all must be aware of what's happening and have an opinion. I want to hear it. what do you think of the situation? What do you think of the EU stance? What do you think will be done? What do you think should be done? What will be the consequences of the action/inaction of this week? Off you go...

At the end of laborious negociations, Ministers of Finance of the Eurozone granted yesterday evening in Greece an extension of four months of their financial support. And it is true in exchange for strict conditions. Athens made in particular a commitment not to announce new measures in a unilateral way and to respect its promises to pay off his creditors. A period of respite for Greece which would be, without this help, short of liquidity from the middle of March.
For me, it’s a good decision if reforms are coherent, an exit from the single currency that would be a bad thing for the Greek but also for the European Union. Since 2010, all the decisions are in favor of Greece to help them to improve their situation so this decision continues in this direction without being too lax.
We know more about it on Monday...

Last Friday, an agreement was found with Greece. The aid plan which expires at the end of the month is going to be extended of 4 months. Greek Prime Minister Alexis Tsipras announced to have won " a battle". However on Monday, Greek have to propose a program of reforms. This program must be validated by the European Commission, BCE and the FMI so that Greece receives from some money. If the Greek program is coherent then Greece is going to obtain a chance to relaunch and to pay off its debts. The Greek government can make the reforms which he wishes. The only condition will be that the balance of the public finances is respected. However, we can ask the question if Greece can restart with a currency as the euro.

In my mind , it is true that greece is financial hot problem , but it don’t forget the difficulties social aspect of population greek (déficience health care, difficulties financial ,….. ) and that aspect for me and more important than financial situation because even if gouvernement greek cook the book to spend beyond its mean.
As EU stance must to give a boost to economic growth by other way less hard than drastic measures and austerity plan , this is why instigation of the new gouvernment Greek of Alexis Tsipras to provide a new approach against auterity policy more social and humain to release economic greek of difficulties debt .
as said Mr Tspiras "We won a battle, not the war," .

I think Greece is in a wrong position today. Especially with its new government which promise commitment which it can’t hold (minimum wage).
So to solve its situation Greek have decided to set up the reforms which were asked by European Union. Thanks to that Europe gives its agreement to pursue its financial support. Moreover I think Europe is too sweet towards Greece. We know that Greece want go out of Europe so it’s not any more an European problem. Furthermore, several economists showed that in reality the exit of Greece of the euro would not be a real problem for Europe. And that, this would be favourable for the future. Their independence’ will would be them only unfavourable.
I think also that Greece don’t deserve the favours which gives her Europe. Because today if the Greece is here today it’s partly because of the bad choice which it was make (tax evasion, tax avoidance, perversion…). So the reforms asked by Europe should not be the compensation of any help to pay for the Greek increase of the minimum wage.
Nevertheless, I hope that Greece is going to manage to go out of this downward spiral otherwise the victims will be still the same.

The main cause of debt crisis of Greek is from the weak ability of financial management along with spending too much, beyond control the government.
In 2014, the total public debt of the Greek states up to 320 billion euros, equals to 170% of its GDP; the unemployment rates up to 65% for those aged 20 to 30. The Greek government precedes the possibility of bankrupted.
The European Economic Community, is committed to support Greek’s credit package more than 240 billion euros in order to prevent the country from broken. On February 24, the final supported package of over 7 billion euros was accepted by 19 finance ministers of the European countries with conditions that Greek has to commit to implement reforms.

In my opinion, besides the financial support policies, their Europe Union may consider partial remission of debts, extending loans and reducing interest rates by the following reasons:
- To reduce the public debt / GDP
- To relax repayment pressure of the debt maturity
- If Greek withdraws from the Euro Union, it may lead to the collapse of this alliance.

Being member of the european union in 2001 is a great opportunity for Greece to be able to access into international capital markets. But it became the reason for its huge debt
From 2010, the Greece economy still depends on financial aid from international lenders (International Monetary Fund, European Central Bank and the European Union). These three institutions have launched two support packages of 110 billion euros in 2010 and 142 billion in 2012 to save Greece. And the European Financial Stability Fund provided Athens credit of nearly 250 billion euros. However, the Greece economy is in recession and therefore the reduction in debt or at least reducing the burden of debt for Greece is becoming more urgently.
In my opinion, there are three ways to reduce the debt of Greece. The first solution is the cancellation of debt. With this method, the creditor would cancel a part of Greek debt. Although they are lost some of that debt, but the rest is sure to be repaid. The second solution is to reduce interest rates. And the last solution is to extend the time to pay the debt. While this method will take longer, but it ensures that the debt will be repaid all.

Greece will ask Thursday its eurozone partners an extension for a period of six months a " loan agreement ". Already proposed solution Monday by the European Commission, which had made a proposal to this effect, rejected by Wolfgang Schauble sources said. Germany continues to demand compliance with the original program, an untenable position for Greece and isolated within the EU.
The problem is that without financial support , Greece could soon find themselves strapped for cash because it will face in March to IMF debt repayments . This could force her to leave the euro zone.
Greek banks would face a liquidity crisis that could lead to the establishment of a control capital flow limiting authorized withdrawals.

Greece is on the verge of bankruptcy. In more Greece and Europe does not manage to find a common ground. There is not negotiation anymore between Greek and European.
Nevertheless it would be advantageous that he(it) can have a constructive dialogue there to solve at best the various problems which meets Greece.
This mutual incomprehension questions seriously the place(square) of Greece in the European Union.
According to certain economists the exclusion from Greece of the European Union would not necessarily be bad for the European Union.
This solution would allow Greece to act as he/she pleases. So the Government would be more free to set up the politics(policy) which would ask for least sacrifice possible for population.
But this solution can not be for the taste of the various investors.

In recent weeks the economic and political landscape of Europe has been shaken by negotiation between the leftist government of Greece and the "troika" (IMF, European Central Bank, European Union). In my opinion the fight against austerity policies is the path that opens Greece in the public debate, as is known the opinion of the highest academic world leading two Nobel laureates in economics Joseph Stiglitz and Paul Krugman, and also the Economist Thomas Pikety time who say austerity recipes will not make the EU out of the economic crisis, think of following these policies is impoverish people and that banks continue to make their business and not pay for the damage caused . The power of Germany has made the EU take a closed position where it is not willing to give anything. With recent events and the list of reforms that give the Greek government, it is necessary that the extension of the aid package approved this week stakes continue on a path of poverty and inequality or retake the course of the well-known state European Welfare.

The Germans believes that the bailout program, austerity, are the only way for that Greece goes better and respects its reforms. If Greece leaves the eurozone we can imagine bank runs, capital flight and capital controls. So its not a good idea. Athens has every incentive to reach a deal. And in the other side, i think that the eurozone finance ministers want to avoid the Greece exiting the eurozone. Indeed, the risks of contagion can not be ruled out. The departure of Greece will destroy once and for all our eurozone. So they must do compromise. Maybe that the new greek government would have to accept that it cannot adopt all the measures it promised. And eurozone finance ministers would have to accept that Greece cannot go on as before with as much austerity.

Greek economy was already fragile before they joined the euro. Public spending increased when they adopted it. Public sector wages rose faster than in the other european countries. Greece also incure dept for the 2004 Olympics.
Money was living government’s coffers, while its income suffered from widespread tax evasion. The deficit went out of control. The european dept crisis also revealed hidden borrowings, and Greece wasn’t able to face them. The country had no choice but asking massive loans from the European partners and the IMF.
In May 2010, they provided 110bn of bailout loans to Greece to help it paying its creditors. A second, 130bn-euro bailout was ratified the next year. The conditions linked to the loans agravated the Greece situation.
In exchange Greece adopted an austerity drive, involving spending cuts and pension reforms. It had a bad effect on the Greek economy . To prevent the effects from spreading in the UE zone , european leader developped a 700bn euro firewall. The anti-bailout party ,Syriza, elected on January 2015, renegociated a new creditor agreements with the Eurogroup. Leaving the euro would make it harder for Greece to pay its depts. In priority, the government must fight against tax evasion and corruption.