With this intention, if a Grexit occurs it will be having a devastating impact on its economy because they will not receive debt forgiveness for what they owe to the rest of European governments. This will cause an increase in inflation, unemployment, and their asset prices will plummet. Millions of people will wake up knowing that their Greek euro deposits have transformed into devalued Drachma deposits. More important, Greece will never get a loan from the International Monetary Fund (IMF) or from the European Central Bank (ECB) creating a great burden on its citizens because taxes will increase. Truly, a Grexit will hurt its citizens the most than the 19 European countries who use the euro, because since in 2010, many international corporations
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The second is by disrupting the other EU member states in situations similar to Greece’s. And the third is by bringing about unexpected political outcomes.”[7] This shows that European countries are most exposed to the turmoil in Greece because the Greek government is in debts with the public institution such as the European Commission Bank and International Monetary Fund who has been bailing out many EU nations that have the same austerity as the Greek’s government. Therefore, those countries in the Eurozone will be forced to write off Greece’s debts. Given that, a Grexit would be a catastrophe for the European Union due to the financial contagion that the Greek crisis can create to the indebted countries like Spain, Portugal, and Italy. Indeed, Greece’s exit can cause a prospect of contagion of bank collapses throughout European nations, leaving them with no choice but to accepted the austerity from the troika; that has to cause the economy to shrink in Greece by maximizing the debt even further. How does the Greek financial crisis affect ordinary Greeks? Greek people have been paying higher taxes since the global recession and the government keep imposing extra tax rises. There have been major public sector job losses leaving many Greeks without a job to provide the basic necessity of life such as food, water, shelters, and clothes for their families. As result of this, there have been protesting on the streets in Athens due to “…Greece’s GDP has already dropped more than 25 percent. Unemployment is hovering around 25 percent. For youths (25 and younger), the rate is roughly 50 percent.”[8] This demonstrates that the Greek’s government haven’t been able to control their finances and the Greek people are feeling poorer in the entire Eurozone. The Greek people have lost credibility of
The second is by disrupting the other EU member states in situations similar to Greece’s. And the third is by bringing about unexpected political outcomes.”[7] This shows that European countries are most exposed to the turmoil in Greece because the Greek government is in debts with the public institution such as the European Commission Bank and International Monetary Fund who has been bailing out many EU nations that have the same austerity as the Greek’s government. Therefore, those countries in the Eurozone will be forced to write off Greece’s debts. Given that, a Grexit would be a catastrophe for the European Union due to the financial contagion that the Greek crisis can create to the indebted countries like Spain, Portugal, and Italy. Indeed, Greece’s exit can cause a prospect of contagion of bank collapses throughout European nations, leaving them with no choice but to accepted the austerity from the troika; that has to cause the economy to shrink in Greece by maximizing the debt even further. How does the Greek financial crisis affect ordinary Greeks? Greek people have been paying higher taxes since the global recession and the government keep imposing extra tax rises. There have been major public sector job losses leaving many Greeks without a job to provide the basic necessity of life such as food, water, shelters, and clothes for their families. As result of this, there have been protesting on the streets in Athens due to “…Greece’s GDP has already dropped more than 25 percent. Unemployment is hovering around 25 percent. For youths (25 and younger), the rate is roughly 50 percent.”[8] This demonstrates that the Greek’s government haven’t been able to control their finances and the Greek people are feeling poorer in the entire Eurozone. The Greek people have lost credibility of