Bailout Debate

Greek Crisis Threatens to Destabilize Europe

  • Why it matters

    Why it matters

    The Greek crisis is bubbling up once more, with disagreements between the European Union and the IMF, and accusations that Greece has not implemented promised reforms. An immediate deal seems unlikely.

  • Facts


    • According to figures from the European Union, the Greek economy grew unexpectedly by 0.3 percent in 2016, and will grow by 2.7 percent in 2017.
    • The European Union and German government want Greece to achieve a primary budget surplus of 3.5 percent of GDP for 10 years, a target the IMF believes is unrealistic.
    • In recent weeks, a number of German politicians have again hinted that Grexit—Greece leaving the euro zone—may be inevitable.
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Akropolis in Athen
The Greek crisis has not gone away. Source: DPA

Central bankers usually tend to speak cautiously and moderately. They know any comment could send shockwaves through the markets. But these are not normal times in Greece.

On Monday, speaking before the Greek parliament, Yannis Stournaras, head of the Bank of Greece, made a drastic comparison: anyone demanding the reintroduction of the drachma “should travel to North Korea. They’ll see what would happen here.”

The specter of Grexit has reappeared, and not just in Athens. In many European capitals, discussion centers on whether this year will see a Greek departure from monetary union, so narrowly avoided in 2015.

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