Greece is in the economic equivalent of complete and total panic right now, and the rest of the European Union is trying to figure out what to do.
Though Greece has been facing financial trouble for a while, it wasn’t until 2009 that things got really bad. The Friedrich Ebert Foundation (FES) reports that in that year Greece went from a fiscal crisis to a sovereign debt crisis before finally going into a recession. The International Monetary Fund (IMF) and European Commission have tried to help Greece out of the crisis by encouraging reforms in exchange for financial assistance. Negotiations, however, have stalled. Here are the reasons why:
1. Political Favors And Corruption
Greek politicians and officials take much of the blame for their country falling into a crisis. According to FES, politicians used civil services and other public sector agencies to exchange political favors for votes and influence.
2. Growing Unemployment
There are many reasons Greece now faces such troublesome economics. Growing unemployment is a major contributor to why the country has struggled to get out of trouble. As the report from FES noted, the rise of unemployment is contributing to national poverty while also putting stress on an already struggling welfare system.
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