When you think of Greece you might think about the delicious food or the tropical weather that this country is known for. Too bad this is no longer the case. Greece has become synonymous with national debt. Just this past weekend, Greek officials stated that the country’s deficit will reach approximately €19-billion by the end of 2011 (Globe & Mail). Now you might think to yourself, why does this concern the European Union? Well, in order to avoid further national debt the members of the European Union must bail out Greece. They have proposed a first installment of €8-billion (Globe & Mail). In our class discussion about Finance, we touched on the Greek debt crisis. The question was asked, “Are countries susceptible to interest fluctuations?” After reading this article, I have come to the conclusion that they are. Greece’s finances are very unpredictable. If they want to borrow money, Greece needs to raise taxes in order to pay for government expenditures, such as salaries for workers. Money spent also needs to be cut back so that the debt does not increase. In the coming months, it will be interesting to see how Greece’s economy fairs and if it will ever recover from this debt crisis.
