Greece’s economy is facing a debt crisis at the moment. In 2020, their national debt was around $430 billion USD and is predicted to continue growing in the years to come (Statista). When Greece first joined the European Union in 1981, their economy was sufficient. However, this changed when the Panhellenic Socialist Movement and the New Democracy parties came into power. To keep the people of Greece happy, these parties made a protectionist economy, meaning that they stayed away from international trade. Along with that, they created various liberal policies that were extremely costly, and put them in the situation they are in today.
The Greek government continuously adjusted their spending. Workers in public departments had their salary risen yearly, pensions were high, were entitled to additional months pay on holidays, and paid time off vacations. These factors led to debt piling up for Greece, which caused them to join the Eurozone in 2001. Being a part of the Eurozone means that the country has adopted the euro as their main currency, making it easier for Greece to borrow money from European countries. Due to this, Greece enjoyed economic growth until the financial crisis of 2007-2008, when investors started asking for more yields for debt. In the aftermath of the crisis, Greece’s debt skyrocketed. European figures and investors have even loaned Greece around $371 billion USD but their debt is still predicted to increase overtime. Even though Greece will have to face the consequences of their spending, they should restructure their government and policies so that this problem does not happen again.
Sources:
https://www.investopedia.com/articles/personal-finance/061115/origins-greeces-debt-crisis.asp
https://www.thebalance.com/what-is-the-greece-debt-crisis-3305525
https://www.statista.com/statistics/270409/national-debt-of-greece/
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