Bankruptcy: What Happened To Greece?

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What may transpire provided that a country adjudged its insolvency? What if this country became impotent to pay its debts and bruited about so? A country of millions of residents will bite the dust against its mortgagees; what can they do to it? Take from and stake their claims in its roads and foundations or its history, monuments, and shrines or do what? Can you believe such a country where the most subserous woes took place—bankruptcy!

A subtle insight -

To steer clear of erring, no country disseminates or promulgates going into liquidation. It is a financial rule, not a decree. When a nation becomes bankrupt, none of the en passant noted things happens; people do not sell everything of its establishment like thus when stepping into dead man's shoes.

It is called a country defaulted on the loans; this means that this country is not able to pay the upcoming debt in its time, not that it is not having money, to be writ large and devout.

A real story -

It is a country famous for tango dancing, Maradona, Lionel Messi, Che Guevara’s origin. Yes, it is Argentina. Artlessly, it was once one of the most opulent 10 countries worldwide which is now in the 70ths when mentioning the GDP (Gross Domestic Product)!

At the beginning of the 20th century, it was eminently commendable that is was beyond compare and had no parallel. Italians were crossing the Atlantic Ocean to live there! Half of Buenos Aires residents were not born there.

They were Halcyon days lasted for 43 years even in the First World War where they were exporting food to England during the war. Argentina was burgeoning by 6 percent annually. Everything was in apple-pie order; however, Life is just a bowl of cherries. A coup upset the apple cart in 1930.

Subsequent to that, five other coups occur in less than 50 years—1943, 1955, 1962, 1966, and 1976. There were other pernicious ravages like a 2000-percent inflation rate, corrupted politicians, and repressive approaches that begot privatizing a plethora of Argentina’s foundations. Loans are surging.

By dint of these loans, Argentina commenced selling everything as a wild goose chase to pay its debts.

On the 26th of December 2001, Argentina lags behind a 93-billion-dollar debt—the largest one ever in this period. In a blot from the blue manner, money was taken from it in that is was anticipated that the currency will depreciate. For two years starting from 2003, no money was entered in Argentina.

Products’ prices mount 40 percent. The economy loses 11 percent of its value. Individuals income diminished from 7000 dollars before 2001 to 2500 after 2001. This was not the setting of wheels in motion. In the last 200 years, Argentina presides its debts 8 times; two of them was in the last 17 years.

Greece, from elevation to degeneration -

Albeit the Argentinian delay in debts was the largest then, it is not the most colossal in history. It happened in Greece when it lagged behind a 138-billion-dollar debt, in March 2012. Sundry people leaped out of their skin on account of hearing that; such a developed country is about to plummet and collapse.

It was the first time a developed country defers its loans. The situation was atrocious in Greece; getting involved with 19 in the currency is not easy at all.

Here is the elucidation. Generally, when a country be in a desperate need of money, it asks its central bank for printing money, ergo the value of its currency will decrease occasioning a lower price in its products, but this will adversely influences the citizens in that the prices will augment.

The less your products are, the more attractive they will be, thus you will procure money like China. On the contrary, Greece cannot execute so since it is involved with 19 other countries in currency. What is more is that the Greek economy is highly dependent on tourism.

In 2008, the American stock recorded its worst loss since 2001; a cornucopia of banks avowed that they went into liquidation. Monetary minefield worldwide. When so happened, no one was able to go to beaches, hence countries relying on tourism will get harmed courtesy of being incapable of paying the loans for erecting these beaches.

By the end of 2009, the Greek government proclaimed that the situation is under the weather. The European Union started to be horrified owing to the possibility to ruin. Provided it devastated, sundry countries will meet with the same ravages.

After setting the European Union in 1993 and the unified currency in 1999, all have invested in all, thus making an investment interconnection. This interconnection is a double-edged sword; it helped sundry countries to thrive; however, it a country is about to collapse, it will not be so alone.

Not only the European economy was jeopardized—the entire world was also endangered that it may undergo a vicissitude worse than the depression happened in the 1930s which was the worst depression ever.

What happened to Greece at last?

The European Union provided Greece with 130 billion dollars, but nothing got improved; the International monetary fund with The European Union again provide it with 130 billion dollars, and the result was not different from the first. Again, Greece lagged behind a billion-dollar debt for the International Monetary Fund.

This IMF is denoted as the last resort worldwide by dint of the reverberations concomitant of delaying in paying. Likewise, Greece went through sundry ramifications, like a 25-percent slump in economy, 27 percent of unemployed people, and many others.

Succinctly, Loans and debts is part and parcel in our world en bloc. The most developed countries have loans for other countries. In 1990s, Japan was the biggest mortgagees for America; a profusion of Japanese companies with some affiliations purchased the Empire State building.

At this moment in time, the biggest mortgagees for America is China. Can America vex China? Maybe, but she will not foment thus since the mortgagees can ask for their money which will be a reminder for remembering that they have loans for them.

- Written by Mohammad Hassan (EMN Community Member From Egypt)

- Edited by Mridul Goyal (EMN Community Member From New Delhi, India)
Bankruptcy: What Happened To Greece? Bankruptcy: What Happened To Greece? Reviewed by Mridul Goyal on June 21, 2020 Rating: 5

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