Greece Run For Funds: Should European Creditors Lend To Greece? Essays Examples
The financial crisis in Greece are seem to be getting worse as its European creditors are not offering a relaxing structure for its bailout program. In addition, because of falling tax revenue and other government income sources, the economy is on the brisk of financial collapse. As per the recently announced official data, the tax collection in the country have dropped by 7% from November to December and if no mid-way solution is taken out, Greece will be forced to declare bankruptcy that will lead to default on its debts and most importantly, the decision to abandon euro and start printing its new currency.
However, the major point of discussion here is that if Greece should be granted another bailout by the European creditors? Although debatable, but in my opinion, European creditors should grant bailout to Greece because if the nation exits the Eurozone, this will bring a devastating effect to EU banks. Important to note, a majority of EU banks are exposed to Greece and if bailouts are not provided, Greece is most likely to declare bankruptcy followed by default on its debt payments and all such actions will not only prove a carnage to Greek economy but EU banks will also loose a big percentage of value of holdings in treasury instruments of Greece. This will also prove detrimental to European financial markets that will face decline in value once Greece defaults on their debt instruments, thus possibly eroding billions of euros of the investors.
Hence, considering this multiple effect of the outcome where not only EU banks are involved but also a common investor, European creditors should offer bailout to Greece to revive its economy and avoid a big catastrophe.