Since 2007, Greece has faced a debt crisis as a result of the financial plight that plagued the world. This past week the government in Athens and creditors agreed to a bailout reforms needed to unlock loans from its 86 billion euro rescue package. Both the European Union (EU) and the International Monetary Fund (IMF) have started negotiations regarding Greece’s fiscal tragets after a bailout. On May 22, the finance ministers of European Union member nations will meet in Brussels to discuss the bailing out Greece. The means to bring about a resolution to this substantial debt must be outlined by this meeting on May 22, and Prime Minister Tsipras believes, “Greece has done its part and all parties must now fulfill their commitments,” which is what he said to his cabinet on Thursday.
When the economy began to crash in 2007 and continued to do so, Greece became one of the most seriously hit in Europe and even the world. Most have since recovered and are continuing to expand thier economies, but Greece continues to be stuck in a financial crisis. This meeting on May 22 could finally put a cap on their debt that continues to grow, which would then allow for Greece to expand its economy and therefore improve its economic situation. However, if EU countries decide to ultimately not invest in Greece’s bailout, the country will be foreced to to continue urging foreign investment. In order to save the country from eventually collapsing, the government must simultaneously also at least attempt to solve their economic crisis on their own, without depending entirely upon foreign investment. Recently, in regards to solving their economic crisis, Greece will cut pensions by 2019 and begin to reduce the tax-free threshold in 2020. This is a start, but more programs and services must be cut in order to reduce their debt. Another route they could take is instituting programs similar to FDR’s New Deal programs that came about during the Great Depression of the 1930’s. These programs would put people to work, which would in turn decrease unemployment and increase GDP. This could then possibly increase confidence of EU members to invest in bailing out Greece.