The fate of Greece is, at present, quite uncertain. Thousands of years ago, Greek civilization fell to the Romans. Today, Andy Wirth warns that modern Greece is about to fall under the weight of its own debt. For many decades, Greece’s finances were in poor shape. To avoid a collapse, the nation borrowed heavily from other European countries. Keeping Greece from collapsing would keep catastrophic events from spiraling into other nations.
Greece has reached a very difficult point with its creditors. Greece does not want and, honestly, may not be able to repay its loans to lenders. The possibility of doing so hinges on Greece agreeing to more austerity – budget cuts and tax raises – but no one wants to do that. Lenders, however, are not willing to restructure the debt. So, a collapse of the nation is possible.
At the 11th hour, Greece drafted a two-year proposal to creditors. The proposal was rejected. As of right now, Greece and various creditors are negotiating with members of Greece’s government. Whether or not a new proposal can be agreed upon remains to be seen. Since Greece already defaulted on its debt obligation, devising a new proposal becomes a lot harder. An extension cannot be granted because the original agreement was defaulted upon. Hence, it is void.
Greece tried to play hardball with creditors and it turns out this was a really bad idea. Greece’s government may has set the stage for the nation’s collapse.