Greece has made top headlines across the world recently as a result of significant financial problems. Similar to what has happened across the globe, the government is yet another victim of the difficult financial times. What has caused this problem? What events led up to it? How do the events in Greece impact you and your international business?

It is hard to believe how much change has happened in the financial markets in the last few years. The most recent example in Greece sheds light on how carrying too much debt can have disastrous implications for ongoing operations. In reality, Greece is running into the same troubles that many companies have when they borrow too much.

Starting with a bond issuance, Greece initially sought about $10 billion from the free market to patch its financial condition. This issuance was met with strong initial demand, but that has since curtailed. The country is now seeking additional aid from legislative bodies including the European Union and International Monetary Fund. Leadership in Germany has been very vocal in its opposition of a complete bail out, preferring to penalize Greece for its poor financial management through higher priced loans.

What does this all mean to you? Because of these financial troubles, Greece has raised taxes on the middle class as well as shed unnecessary government positions. This crisis marks the beginning of some unpopular government reform which will help the country realign with European Union regulations and eventually get back on its feet. Although demand for products remains largely the same, more difficulties with processes and procedures to get business done, such as obtaining government permits, should be expected. Lastly, because of the austerity measures being put into place, there is potential for riots and violence driven by the labor unions.

As with any market, be sure to do your research before entering and be realistic about your prospects.

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