Banking Sector In Greece Is Showing Signs Of Recovery

Greece’s banking sector is reviving but the outcome will depend on several factors - most important being the political tussle with Eurozone:

Greece is again in the news. Very recently, the International Monetary Fund has warned that the country’s debts are on an ‘explosive path’, which is once again bringing the EU on to a crisis. This would also mean all the professed austerity and economic reform measures that Greece was advised to implement and had tried to implement had come to a naught.

There is an element of unwillingness among international financiers like IMF and even countries in the EU to extend any more funds to Greece. They feel it is turning out to be a bottomless pit and nothing tangible had come out of the massive fund infusion that had happened.

The reform measures that Greek government enacted included 12 rounds of tax hikes, cuts in spending etc from 2010 to 2016. In spite of these measures, the country needed fund infusion by way of loans in 2010, 2012, and 2015 from the Troika - International Monetary Fund, Eurogroup, and European Central Bank. Even the government had to negotiate and implement a 50% ‘haircut’ on debt owed to private banks in 2011. Greece also had the distinction of becoming the first developed country to fail to make an IMF loan repayment. It had at one time debts amounting to €323 billion, which is estimated to be around €30,000 per capita. In February 2017, the Greek finance ministry had said the government’s debt load is now €226.36 billion after increasing by €7 billion in July this year to its creditors and many global analysts feel the country is most likely to default unless there is fresh cash bailout.

THE PLUNGE