Greece Is Just Chasing An Illusion Of Financial Independence

A Greek drama rarely ends after just one act or scene and although the recent new bailout talks haven’t really been extensively covered by the media, the Greek population will once again have to make sacrifices to make sure the country gets more bailout money.

Since the country’s finances collapsed in 2010, it has received in excess of a quarter trillion Euro in bailout funds, pushing the Debt to GDP ratio to almost 180% despite its creditors agreeing to a haircut in 2012. What’s even worse is the fact the austerity measures and the bailout terms have actually reduced the Greek GDP by approximately 25% which made the debt to GDP ratio look even worse.

Few people know Greece will have to repay a next tranche of its bailout help in July and will need a cash injection of approximately 7.5B EUR from its lenders to make sure it can cover the repayment. And while the mainstream media don’t seem to care about this at all, it’s not unlikely the current negotiations will result in more ‘muscle-flexing’ from both sides.

To make sure the lenders will agree to making the next tranche of cash available, the Greek population will now suffer even more as the Greek parliament has now voted in favor more tax hikes and pension cuts last week which resulted in new riots on the streets of Athens.

Source: eurasiatimes.org

And even though there’s some serious opposition against the plans to increase the tax-free threshold, Tsipras is now even hopeful the country could go back to a normalized situation. Not only is Greece hoping to be able to try to finance itself on the capital markets again next year, it’s also expecting to reduce the bank and cash restrictions which were initiated in 2014/2015.

Does this mean the country is really doing better? Did the bailout work and is Greece saved?

Definitely not.

Source: tradingeconomics.com

As you can see in the previous image, the consumer confidence has been trending down continuously since the 2014/2015 existential crisis. It’s pretty obvious not a single economy in the world will pull itself together and get out of a difficult situation if consumers are too scared to spend the money they have left or are earning. Indeed, rather than injecting their savings and earnings into the economy, does this mean Greeks prefer to hold onto it as much and as long as possible?

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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