The impact of the economic crisis in Greece has had far-reaching effects, not only affecting the citizens of Greece, but also those in neighboring countries who are also participants in the eurozone. Financial impact from the economic problems in Greece have also shot across the ocean, affecting markets in the United States as investors become leery over the instability of the Greek financial market.
In order to help stabilize Greece and get the economy out of recession, the country is seeking out a second bailout payment from a group of European creditors, which make up 16 different countries who are also reliant on the Euro. However, in order for these countries to provide this financial backing, Greece is expected to go through with certain spending cuts and reforms. These reforms range in requirements from military budget cuts to shaving millions from budget subsidies to pension funds. Unfortunately, as of Wednesday, February 15th, Athens had not yet met all of the necessary requirements, resulting in finance ministers from the Eurozone cancelling a scheduled meeting regarding the bailout money.
The additional bailout money is necessary to assure that on March 20th a $19.2 billion bond payment can be made to gain the necessary bond investors for a debt relief deal. If the bailout does not occur in time, Greece will be pushed further into default. Bailout money will be focused largely on two areas. First, money will go to the banks of Greece, helping prevent them from collapsing from the losses they will see from the planned government bonds. Second, money will go to help reverse the country's deficit. Officials hope that this financial relief can help reverse the economic trend of a 5 percent annual rate reduction, as seen in the third quarter of 2011. The money will most likely also help reduce the 20.9 percent unemployment rate as well as prevent more businesses in Greece from having to claim bankruptcy and close their doors.
