Greek Shift on Terms of EU Bailout
July 1, 2015
At midnight on June 30, the government of Greece officially defaulted on its loan payment to the International Monetary Fund (IMF). Greece is the first Western nation to ever default on an IMF loan since the organization was founded in 1944. Last weekend, Greek Prime Minister Alex Tsipras stated that Greece could not accept the European Union (EU) terms of increased fiscal austerity as a condition of receiving the financial payments Greece needed to repay the IMF without holding a national referendum on Sunday, July 5th. Such a loan default as Greece has had with the IMF makes the exit of Greece from the eurozone and the EU (known as Grexit), far more likely.
Alex Tsipras, leader of the anti-austerity party Syriza, speaks to supporters after the parliamentary elections in Greece in January 2015. Credit: AP Photo
U.S. President Barack Obama called on leaders on the EU side of the conflict to try loosen some austerity policies and try to find a compromise position to keep Greece in the eurozone and EU, saying “You cannot keep squeezing countries that are in the midst of a depression.” This morning, in a televised address, Tsipras announced his government would be willing to accept the bailout offer made earlier this week with some minor adjustments. It was uncertain whether this concession will solve Greek’s mounting financial pressures. The banks in Grece remain closed to maintain what little currency is left in the country. ATM’s have a withdrawal limit of 60 euros per-person per-day, except for tourists using debit cards issued in foreign nations. (Tourism makes up around 20 percent of Greece’s economy.) German Chancellor Angela Merkel stated that no talks with Greece should resume until after Sunday’s referendum is held, meaning that, for now, it is uncertain if the EU bailout is still on offer.
Other World Book articles:
- Anti-Austerity Party Wins Greek Parliamentary Elections (January 2015 Behind the headlines)
- Greece Gets a Reprieve (February 2015 Behind the headlines)
- Greece Closes Banks as Economic Crisis Escalates (June 2015 Behind the headlines)
