The Greek debt crisis explained
Greece is on the brink of bankruptcy again. And the country’s future is on the table.
It has been just five years since the first bailouts began, but Greece still hasn’t been able to pull itself out of debt. Last time, the European troika — a group formed by the International Monetary Fund, European Central Bank and European Commission — provided the bailout money but required Greece to implement intense austerity measures, meaning big spending cuts, to help the economy recover.
This time around, though, a majority of Greek people wants the country’s debt to be handled differently. Led by Prime Minister Alexis Tsipras and the leftist Syriza party, these people believe that austerity did more harm than good for the Greek economy. It has shrunk by a quarter since 2010, and unemployment is over 25 percent.
On the other hand, Greece’s creditors believe that the nation did not make enough changes to address its economic issues.
Now Tsipras and the European lenders, spearheaded by German Chancellor Angela Merkel, have been in negotiations over how to proceed. Greece had been pushing for some debt relief and a plan that wouldn’t lead to harsh austerity measures. But eurozone leaders want to make it clear that Greece needs to take responsibility for its own debt.
If a new bailout plan isn’t decided upon this Sunday, it’s possible that Greece will have to leave — or a make a “Grexit” from— the eurozone, the 19 European countries that all use the same currency, the euro. It’s an outcome neither party wants. An exit is unprecedented and has many in Europe worried about potential fallout from such a move.
As the world’s attention remains on Europe to see what happens next, when it comes to how Greece got to this point, after watching this video you can say, “Now I get it.”