Thursday, April 22, 2010

Greece's budget deficit worse than first thought

Eurostat recently reported that Greece's budget deficit is far greater than the number that was expected last year: a gap of 13.6% GDP, a jump from the 12.7% first expected. However, Eurostat, the European Unions Statistics office, also said it could be far worse if these figures are off. This news has already had an effect on the value of the euro (which fell slightly against the value of the dollar) and stock markets, because people are now worried that Greece might default on its debts, and of course investors will be wary when Greece tries to borrow money.

According to this BBC article, "Greece is swamped by 300bn euros of debt and needs to borrow about 54bn euros this year alone."

Greece is in negotiations for an emergency package from the EU.

According to CNN, the crisis in Greece started much like another current recession... a product of "Years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece badly exposed when the global economic downturn struck."

Not sure if the emergency package is a good idea?But not sure if EU has a choice about it.

1 comment:

Chris said...

I think that the Greece's budge deficit is really affecting everyone in the world as the economy is a domino effect with one country bailing another causing money to be moved in different areas.