What is happening in Greece?

A lot of people are still out of the loop about the situation in Greece, and it is understandable. It is not that easy to explain just what has happened to Greece that has sent it spiraling down the economic drain for the past few years.

It can be traced back to the Greek government offering pay-rises to government employees, who formed about 1/5th of the country’s working population. The Greek government did not have a very stable or strict regimen of debt collection in place, which made things worse, for more money was going out of the government’s treasury than the income. At this point, the government turned to other countries of the EU, who were ready to provide Greece with the loan necessary. EU regulations required the deficit of a country to remain around 3%, and at that point Greece reported a deficit of 3.4%.

Greek Economic Crisis

However, when the new government came into force in 2010, it was revealed that the old government had reported the wrong numbers. The economy was much worse than the other countries in the EU expected, and Greece now owed billions of euros to the other members of the EU. In order to repay these loans, they had to take further loans, sending the country into even deeper debt. The Greek economy, since then, has been taking a number of austerity measures to control spending and reduce borrowing, but it is expected that the economic condition will stay this sore at least till 2020.