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http://www.nytimes.com/interactive/2016/business/international/greece-debt-crisis-euro.html
European authorities have authorized handing 7.5 billion euros,or $8.4 billion,in bailout aid to Greece,which will allow the country to keep paying its bills in the coming months. It has also won additional pledges of debt relief,helping to ease concerns about another crisis in Greece at a time when Europe is dealing with an influx of migrants and a continuing terrorist threat.
Debt relief has been a contentious issue for creditors,with the International Monetary Fund and Germany lining up on opposite sides. The I.M.F. has insisted that Greece cannot meet its budget goals without easing its debts,while Germany remains skeptical of cutting Athens more slack.
They have reached a compromise,of sorts. Greece’s creditors committed to debt relief,although not until 2018 at the earliest, provided the country continues to carry out painful changes.
Athens last year. Greece got the green light for the next round of bailout aid and has won additional pledges of debt relief. Fotis Plegas G./Associated Press
How does the crisis affect the global financial system?
In the European Union,most real decision-making power, particularly on matters involving politically delicate things like money and migrants,rests with 28 national governments,each one beholden to its voters and taxpayers. This tension has grown only more acute since the January 1999 introduction of the euro,which binds 19 nations into a single currency zone watched over by the European Central Bank but leaves budget and tax policy in the hands of each country,an arrangement that some economists believe was doomed from the start.
Since Greece’s debt crisis began in 2010,most international banks and foreign investors have sold their Greek bonds and other holdings, so they are no longer vulnerable to what happens in Greece. (Some private investors who subsequently plowed back into Greek bonds, betting on a comeback,regret that decision.)
European authorities have authorized handing 7.5 billion euros,or $8.4 billion,in bailout aid to Greece,which will allow the country to keep paying its bills in the coming months. It has also won additional pledges of debt relief,helping to ease concerns about another crisis in Greece at a time when Europe is dealing with an influx of migrants and a continuing terrorist threat.
Debt relief has been a contentious issue for creditors,with the International Monetary Fund and Germany lining up on opposite sides. The I.M.F. has insisted that Greece cannot meet its budget goals without easing its debts,while Germany remains skeptical of cutting Athens more slack.
They have reached a compromise,of sorts. Greece’s creditors committed to debt relief,although not until 2018 at the earliest, provided the country continues to carry out painful changes.
Athens last year. Greece got the green light for the next round of bailout aid and has won additional pledges of debt relief. Fotis Plegas G./Associated Press
How does the crisis affect the global financial system?
In the European Union,most real decision-making power, particularly on matters involving politically delicate things like money and migrants,rests with 28 national governments,each one beholden to its voters and taxpayers. This tension has grown only more acute since the January 1999 introduction of the euro,which binds 19 nations into a single currency zone watched over by the European Central Bank but leaves budget and tax policy in the hands of each country,an arrangement that some economists believe was doomed from the start.
Since Greece’s debt crisis began in 2010,most international banks and foreign investors have sold their Greek bonds and other holdings, so they are no longer vulnerable to what happens in Greece. (Some private investors who subsequently plowed back into Greek bonds, betting on a comeback,regret that decision.)