Tag Archive | Economy

201. What happened to the economy of Greece?

Many European banks and the governments of other countries had lent money to Greece to take care of economic problems in the country. Greece is not capable to repay the money with interest. So, there is a sudden decline in normal functioning of the country.

The European Central bank suddenly decided not to give any more money to Greece, as the bank could not get agreement from Greece for delivering money. Since there was limited money left in the banks in Greece, the Government decided to shut the banks. The common people worried very much as they could not draw money from their bank accounts.

It is said that the total debt of Greece to other European countries is about 323 billion Euros. In 2008 economic crisis hit all the countries and countries like Portugal, Spain, Italy and Greece are very badly affected. If Greece reaches the position of no money, the countries who lent money to Greece will also be affected.

Few years before, all the other countries felt that Greece should stop spending more money. But, Greece people started protesting against increasing tax and putting restrictions on spending money. Now, European Union has made Greece to agree for a deal to tackle the huge money problems.

The European Union has agreed now to lend 86 billion Euro over 3 years to solve the issue, by putting lot of conditions to increase tax and cut down expenditure in Greece. It is a lesson to all the countries in the world.