Greece News Today: Bailout Extention Requests Before Possibly Leaving the Eurozone
Hours before Greece was supposed to repay nearly $1.8 billion to the International Monetary Fund (IMF), the southeastern European country has asked for a new bailout deal from the eurozone, requesting a two-year $32 billion aid deal from a bailout mechanism set up for eurozone nations.
No advanced economy has yet to miss a payment on an IMF loan, and if Greece is the first to do so, the country will risk exiting the euro.
As reported by the BBC, Eurozone finance ministers plan to discuss the Greece’s monetary request via teleconference on Tuesday evening.
The European Commission, the executive body of the European Union, feels that Greece should heal its economy by raising taxes and cutting back on its welfare spending.
Recently, Austria Chancellor Werner Faymann expressed his concern over the plight of the Greek people. According to the Guardian, Faymann said, “I stand on the side of the Greek people, who in this difficult position are being proposed more things detrimental to society.”
If Greece is eventually forced to leave the euro, the effect on the companies and banks that are currently owed money by Greece will be immediate.
While exporters rightfully fear that the shock of Greece exiting the euro would spread to other nations, potentially creating a dangers for the world economy, the people of Greece are simply afraid of what a Greek default on its massive $363 billion public debt would do to the country.
All day, people have been lining up at cash machines where withdrawals have been capped at a mere $68 a day. The ATM machines are actually the only way for Greeks to get any money right now, as Greek banks did not open this week after talks between Greece and its creditors fell apart.
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