Article: IMF negotiating new bailout package for Greece

IMF negotiating bailout package for Greece

            by Zachary Chin

September 28th, 2011

            Finance ministers at the International Monetary Fund are once again working to devise a plan to aid Greece in repaying its debts. Like other countries that are considered “developed”, many viewed Greece as a nation that could handle a deficit because similarly to countries such as The United States and Canada, the government was able to borrow money very cheaply, often making it more lucrative to run a deficit.

            Yet, markets and media sources exploded over a year ago, exposing Greece’s possible inability to repay its debts. The lack of confidence, asserts contributors to the blogosphere, caused additional damage because other nations no longer felt comfortable lending money to a nation they could not necessarily trust to repay their debt.

Above is a chart representing the probability that the labeled
country will be unable to repay its debt up to last year. Greece not
only claims the highest percentage, but also the sharpest hike.

            Officials at the International Monetary Fund and the European Union want Greece to be able to use an allotted amount of money to heal the suffering debt crisis, but also expect that reforms will be implemented in order to succeed in arising out of the economic downturn they face today. Poul Thomsen, the IMF mission chief to Greece, asserts that serious reforms will have to be made in order for the bailout to function.

            Many popular Vloggers and bloggers alike see the solution as much more difficult than the Greek government employing traditional methods of gaining revenue. Youtube member “Vlogbrothers” asserts that Greece should implement public projects to boost employment and productivity, giving foreign countries the confidence to lend money once again.

            Others like John Sfakianakis, chief economist at Banque Saudi Fransi, sees Greece’s current solution as completely destructive. The government felt that one certain way of raising revenue was to raise taxes on individuals, bringing more money into the hands of the government. Yet, the strategy has yielded tremendous outrage, and the effects can be observed in enormous suffering in the retail business as well as declining strength of cultural staples like the marketplace.
            If another bailout is to be given, the IMF and European Union want to be sure that the government will be employing a more nuance strategy than what Sfakianakis called a “destructive tax policy” that will only hurt Greece’s goal of becoming an economically stable nation once again.