The Greeks had always been a culture of borrowing.After all, Douceurtjes had to be handed out to bind groups of voters. The blame was a problem for your successors in the future.
Then they ended up in the eurozone and suddenly got to deal with much lower interest rates against which they could borrow.The agreement was that they had to bring a lot of financial discipline to reduce their sovereign debt of more than 100% of GDP. However, that was too much to ask. They just thought you should not let the opportunity go by, the interest rate was so low now.
To cover it all a bit for Brussels and Frankfurt they kept military investments outside the books.But at some point the indebtedness became too large and the country could not yield the interest any more. Then there was no way back anymore.
Not.Greece has not gone bankrupt. Probably you mean the non-payment of the Greek government towards its creditors.
And Greece has fulfilled its obligations.Albeit very laborious and with a lot of help from the Troika (= IMF, ECB and EU Commission). This Troika has assigned many emergency funds in exchange for budget remediation (= big savings by increasing taxes and reducing spending).
So also in this case one cannot speak of bankruptcy.
Ok, maybe you mean “How has Greece come to so many debts?”
The problem is twofold:
On the one hand, you have the government that has distorted its budget figures in order to be able to claim membership of the European Union.This has caused a lot of problems in the introduction of the euro.
On the other hand you have the snowball effect of debts.As you have debts, people only want to lend you money at higher interest rates. But if you have to pay higher interest on new expenses then you will be more likely to be unable to repay that new debt, which will make them even higher interests. And this continues until all debt is phased out. In addition, Greece had to save a lot, which also had major implications for work. So dropped drastically. But fewer workers means less income (= taxes) and more expenses (= unemployment benefit). This reinforced the snowball effect even more.
So while it is true that many Greeks live above their stand, I find it absolutely unjustified to indicate that as the biggest reason.
If you have any questions, feel free.
This is a question with a complex answer.
Greece’s bankruptcy was inevitable like that of Portugal, Ireland, Iceland etc.After the global collapse of financial markets in 2008. There was no more capital to refinance current debts because the banking sector went bankrupt worldwide. The banks were saved by shifting their losses to the citizens.
These losses of German, French etc.Banks became as solidarity to Greeks, Portuguese etc. Presented to prevent bankruptcy and rescue the banks by new loans on even more burden on these peoples.
Another problem was mainly due to the inefficient EU economic structure.In Such an economic model you have surplus countries and deficit countries. This means the industries of surplus countries export goods to the deficit countries. These finance this through loans they get from surplus countries.
Greece was particularly attractive to banks because the country had a fairly low sovereign debt but especially absolutely no private debt and Greeks possessed their homes.This was what one calls a banking law dream.
Greece has recognised irresponsible loans and bankers have been able to accommodate this in an irresponsible way because profit margins were a lot higher than the money in northern Europe.
Still, bankruptcy could have been averted if a surplus recycling mechanism existed as between the states of the US.
This is what you need in a global economy and in particular in an economic union such as the EU because not all countries can be in surplus or we need to find a way to export our goods to the universe.
You can visualize it at the national level.The rural and less industrial Limburg will always be in deficit opposite the industrialised Rotterdam but because there is an internal surplus recycling mechanism, Limburg does not get into trouble like Greece or Portugal, Spain etc. In this economic model of the eurozone.
And yes Greece needed restructuring to tackle corruption and tax evasion.But even if the country had no corruption and taxes were paid, the debts would still be at the same level because of the euro zones structure.