Greece on Brink of Default

Athens
Photo: Olga Symeonoglou

Whether or not Greece will be able to remain in the Euro Zone has been discussed for some time, but for American companies that have business in the unstable country, things are looking very precarious.

In an August 23 meeting between Angela Merkel, François Hollande, and Antonis Samaras, the Greek Prime Minister, Merkel made it very clear that she did not want Greece to be forced to leave the Euro Zone. “Since the beginning of the crisis, I have always clearly said that Greece was part of the Euro Zone and that I wanted it to stay there,” she said.

Samaras requested more time to allow Greece to meet the new conditions, but with €230 billion Euros already lent in an attempt to prevent the situation that is now facing Europe, a large percentage of Europeans do not believe Greece will ever be able to repay their debt.

Le Figaro and Le Monde both reported Monday morning that the Troïka (EU, IMF, and the European Central Bank) has suspended the final €174 million payment that Greece needs in order to avoid bankruptcy. The news of the possible Greek exit from the Euro Zone was also on the front page of Monday’s New York Times.

In a recent poll conducted by the Harris Institute, 54% of Germans are against Greece remaining in the Euro Zone, and 49% of Germans do not believe Greece will be capable of the reforms necessary to be able to exist in the Euro Zone without financial support.

In order for Greece to meet the conditions of its loan agreements to the Troïka, it would need to reduce its spending by €11.5 billion over the next two years. Greece will need to announce its plans for the necessary budget cuts this week.

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