The Brexit might have been the first real EU exit but the Grexit was the start of it all. Greece kickstarted the exit fiasco back in 2015 after it came dangerously close to defaulting on its loans and exiting the Eurozone.
But following non-stop media coverage, and an overuse of the term Grexit, it has all dimmed down enough for you to believe that Greece is doing very well now. But although an imminent crisis was defeated, Greece appears to be no better off today than it was just a few years ago.
Is Grexit Back?
The Grexit crisis came roaring back just a few months ago after Greek citizens pulled billions out of their bank accounts over fears of new cash controls. The economy also shrank at the end of 2016 before staging a recovery in the first quarter. The Greek economy has contracted in four of the last seven quarters, raising fresh fears of another cash crunch.[1]
Back in March, it was reported that Greek financial institutions lost about €4 billion in bank deposits. Germany’s Bavarian finance minister Markus Soeder said “Greece is unlikely to survive the Eurozone over the long term.”[2]
As one might expect, this perfect storm has triggered new calls for Grexit.
Officials on Grexit
Earlier this month, former European Commission president Jose Manuel Barroso said the danger of a Greek exit from the euro still looms. Although steadfast in his opposition to a Grexit scenario, Barroso said several officials in the EU believe the common currency would be better off without Greece. These officials, he said, extend far beyond the borders of Germany.[3]
EU finance ministers just agreed to pay Athens €8.5 billion in fresh bailout funds, marking a key chapter in the country’s debt crisis. The decision came after Eurozone finance ministers looked to offer more clarity on Greece’s future debt path. Officials voiced their optimism that Greece would still be able to get the relief it needed to finally get out of debt.
“It’s a very constructive decision that will help Greece, also on the international market, to gradually get more credibility,” Luxembourg Finance Minister Pierre Gramegna said after the meeting, which was held in his home country. “The goal is for Greece to go back to the markets in the coming months or year.”[4]
The ministers also agreed to a “contingency mechanism” in the event future debt risks become more adverse. These contingencies may include measures such as interest rate deferral.[5]
Greece’s path out of debt, if at all, will be long and painful. The national economy is a shadow of its former self, as citizens struggle with a lack of employment and upward mobility.
[1] Trading Economics. Greece GDP Annual Growth Rate.
[2] Jim Edward (23 March 2017). “’Grexit’ is back.” Business Insider.
[3] Ekathimerini.com (6 June 2017). “Grexit risk still exists, former EC chief Jose Manuel Barroso says.”
[4] Viktoria Dendrinous, Nikos Chrysoloras and Stephanie Bodoni (15 June 2017). “Greece Wins 8.5 Billion Euro Payout as Debt Clarity Deferred.” Bloomberg Politics.
[5] Viktoria Dendrinous, Nikos Chrysoloras and Stephanie Bodoni (15 June 2017). “Greece Wins 8.5 Billion Euro Payout as Debt Clarity Deferred.” Bloomberg Politics.
The Brexit might have been the first real EU exit but the Grexit was the start of it all. Greece kickstarted the exit fiasco back in 2015 after it came dangerously close to defaulting on its loans and exiting the Eurozone.
But following non-stop media coverage, and an overuse of the term Grexit, it has all dimmed down enough for you to believe that Greece is doing very well now. But although an imminent crisis was defeated, Greece appears to be no better off today than it was just a few years ago.
Is Grexit Back?
The Grexit crisis came roaring back just a few months ago after Greek citizens pulled billions out of their bank accounts over fears of new cash controls. The economy also shrank at the end of 2016 before staging a recovery in the first quarter. The Greek economy has contracted in four of the last seven quarters, raising fresh fears of another cash crunch.[1]
Back in March, it was reported that Greek financial institutions lost about €4 billion in bank deposits. Germany’s Bavarian finance minister Markus Soeder said “Greece is unlikely to survive the Eurozone over the long term.”[2]
As one might expect, this perfect storm has triggered new calls for Grexit.
Officials on Grexit
Earlier this month, former European Commission president Jose Manuel Barroso said the danger of a Greek exit from the euro still looms. Although steadfast in his opposition to a Grexit scenario, Barroso said several officials in the EU believe the common currency would be better off without Greece. These officials, he said, extend far beyond the borders of Germany.[3]
EU finance ministers just agreed to pay Athens €8.5 billion in fresh bailout funds, marking a key chapter in the country’s debt crisis. The decision came after Eurozone finance ministers looked to offer more clarity on Greece’s future debt path. Officials voiced their optimism that Greece would still be able to get the relief it needed to finally get out of debt.
“It’s a very constructive decision that will help Greece, also on the international market, to gradually get more credibility,” Luxembourg Finance Minister Pierre Gramegna said after the meeting, which was held in his home country. “The goal is for Greece to go back to the markets in the coming months or year.”[4]
The ministers also agreed to a “contingency mechanism” in the event future debt risks become more adverse. These contingencies may include measures such as interest rate deferral.[5]
Greece’s path out of debt, if at all, will be long and painful. The national economy is a shadow of its former self, as citizens struggle with a lack of employment and upward mobility.
[1] Trading Economics. Greece GDP Annual Growth Rate.
[2] Jim Edward (23 March 2017). “’Grexit’ is back.” Business Insider.
[3] Ekathimerini.com (6 June 2017). “Grexit risk still exists, former EC chief Jose Manuel Barroso says.”
[4] Viktoria Dendrinous, Nikos Chrysoloras and Stephanie Bodoni (15 June 2017). “Greece Wins 8.5 Billion Euro Payout as Debt Clarity Deferred.” Bloomberg Politics.
[5] Viktoria Dendrinous, Nikos Chrysoloras and Stephanie Bodoni (15 June 2017). “Greece Wins 8.5 Billion Euro Payout as Debt Clarity Deferred.” Bloomberg Politics.
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