Germany Rejects Greece Bailout Deal

For those who follow international economics, the news of Germany rejecting Greece’s plea for a restructuring of its bailout deal isn’t a surprise. As international observers watch the Eurozone lurch from one financial and economic crisis to another, the chance of Greece leaving the EU is becoming more and more realistic and all signs are pointing to that happening. While Germany’s decision to say no isn’t the be all end all of the matter, Germany is the Eurozone’s strongest economy and so it’s decisions have unbalanced weight behind them. The Greek government is still saying that the deal might go through but with Germany saying no, the chances of some sort of successful reconciliation is getting further and further away.Eurozone_dates

Ever since the anti-austerity Syriza party was elected in a total sweep in Greece, the government has been lobbying for a change in the bailout terms that they say have continued to hurt the economy and prevent any sort of economic growth. The Greek government wants a series of short-term bridge loans to help keep the country afloat while new bailout conditions and plans are figured out so that the Greek economy can stay in the Eurozone, not face crippling cuts to governmental services, and still get money to help support new infrastructure and businesses. While these seem reasonable on paper, Germany (and other countries) have been wary of giving in to the demands even as Greece floats the threat of totally pulling out of the Eurozone if the demands aren’t met. Seeing as how bailout restructuring was a key part of Syriza’s platform during elections, the government has to stick to its guns and not give in.

If the Eurozone finance ministers all officially say no then Greece very well might leave the Eurozone for good. This would be a huge blow to the entire organization and could very well set a far more dangerous precedent. Other more independent countries, and those that have harsh feelings towards the austerity cuts the Eurozone has placed a numerous governments in return for bailout money, might use this as an excuse to leave the Eurozone too. Germany and those in charge have angered many countries through the demands for frequently painful levels of austerity and if one country pulls out, those that are angry might also pull out. If numerous countries were to leave the Eurozone then it might collapse and that would be bad for all countries involved.

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