We are sure you’ve seen so much about Greece and its struggles in the news of late, here is our very brief overview.
Greece is a country in turmoil. Its economy is a wreck and the debts maturing in Summer 2015 are sizeable enough to declare the country Bankrupt. €1.5bn is due to be paid to International Monetary Fund in the next month but this sum pales in comparison to payments of €3.4bn and €3.6bn due to the European Central Bank in the coming months.
Since the well documented global financial crisis billions of euros have been invested to keep Greece in the Eurozone but the country now looks more likely than ever to leave. What would be the consequences of the named “Grexit”?
- Uncertainty – no country has ever left the Eurozone and the process of Greece’s departure would be improvised.
- Default – Greece would default on its €320bn debt of which €50bn is owed to Germany.
- Contagion – Greece’s exit would put peripheral Eurozone members in danger with potential investors losing their faith in struggling Eurozone economies such as Spain, Italy and Portugal.
Greece itself would likely have a future with a devalued currency with concerns of hyperinflation arising. The people of Greece have suffered greatly given the country’s demise and it has been predicted should the country indeed leave the Eurozone would result in a fall in Living Standards by 80% owing to hyperinflation on Imports.
No matter what happens next the story of Greece and Eurozone highlights the volatility surrounding Europe and the financial struggles it faces. Often, it is the average citizen who suffers.
Though not property related, we must emphasise we live in a difficult economic time and it will take some time before we are back we were prior to 2008. If you have any European Debt issues or concerns contact our team today for the impartial and independent advice.
James Bell – Director