GREECE DEBT CRISIS - AN OVERVIEW

Recently, Greece made an unwanted history- it became the first developed economy to default on loan from International Monetary Fund. But why did Greece need a loan from the IMF in the first place? The reason is simple- the Greek economy was floundering and continues to flounder. Although economists trace the history of the Greek Recession from the year 2009, several sources have traced the inception of this series to mid-2007, when the country was hit by 3 distinct recessions.

Greece, being a part of the ambitious European Union, found help soon. The Union helped the country with a financial aid of $140 million. But the conditions set for this deal were harsh. According to the deal, the Greek government was to introduce austerity measures in the country so that it would be able to repay the loan on time, and the George Papandreou- led government obeyed the European masters.

But then the change came in the form of Alexis Tsipras and his anti-austerity government elected by the Greek citizens in 2015. the government was popular with the masses, but the removal of austerity measures meant that the country had to dig deep into their pockets to repay the IMF's loan.

On 9th April, 2015 against all odds, Greece paid an amount of 448 million euros to the IMF. The hopes gathered courage and found its way among the global economy. But it didn't last long. Once again the country was almost bankrupted, and announced that it didn't have any money to pay back the IMF.

So what does this mean? For Greece, this may mean that it might eventually no longer remain a part of the EU. Greece's crash is sure to cause enough ripples that may upset world economy, and that is precisely the reason why many countries are keeping an eye on their stock markets, because as history has taught us, no country is isolated from others and neither is its fate.

Akhil Das