Greece's woes have been a well-publicized global topic over the past year. Between its staggering debt, its default on these debts, and discussion of its exile from the European Union, Greece has struggled with pulling its way through an web of economic troubles. There is, however, a glint of optimism for the country. On August 14th, Eurozone finance ministers approved Greece for a new bailout package, its third such deal in five years. The package was agreed upon after a half-year's worth of negotiations between Greece's government, the Eurozone, and the IMF. While not all Eurozone countries have yet given approval, the bailout is considered a relief for a situation that threatened to break the Eurozone apart. It is yet to be seen how it will affect Greece and the rest of the Eurozone in the long run.

The bailout would give the embattled country €86 billion over the course of three years. As of now, Greece is on schedule to receive €13 billion by August 20th, so that the nation can pay off €3.2 billion in bonds currently held by the European Central Bank. By late fall, it will have received €26 billion total for various purposes, including stimulation of the big banks. However, the money is not coming free. Greece will be forced to make budget cuts and raise taxes to accommodate for these new funds, which will most likely lead to overall decreases in GDP over the next few years. Also, banks and their creditors will have to take losses before gaining funds for recapitalization. The heavy circumstances the bailout falls under have led the chief of the IMF, Christine Lagarde, to comment that the country will need even more relief than the bailout proposes, and that Greece will not be able to fix its unsustainable debt on its own. As a result, Eurozone finance ministers are considering writing off some of Greece's debts, although other countries warn that forgiving Greece of too much of its debts will lead to even more consequences for the Eurozone. All of these issues are present on top of the fact that Greece's debt has politically divided the country. The left-wing party that the current Prime Minister, Alexis Tsipras, falls under has lessened its support for the PM, and new elections may be called soon. If this happens, the bailout may take even longer to implement in the country.

With the new bailout, Greece has been given new a chance to stand for itself, albeit rather feebly. The country will remain in the Eurozone, and if the remaining countries will vote to help Greece further, it will gain major support. However, it all depends on how Greece deals with the money from the bailout and the circumstances it comes under. Do you think this bailout package will be beneficial for Greece and the Eurozone?

Share this article