12:39 GMT27 November 2020
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    The possibility of Greece dropping out of the currency union is once again in the spotlight, as tensions between the IMF and the country's government grow stronger.

    A meeting is scheduled on Monday where the Eurozone's finance ministers will determine if it is time to complete a review of Greek economic plans, which has been delayed multiple times because of disagreement regarding the the array of public spending cuts that Athens needs to make.

    Cuts in public spending, such as pension reductions, are seen by the lenders as a key to reviving Greece's banking sector and restoring business. There is quite a lot to restore: Greek unemployment remains the highest in Europe at almost 25 percent — and just under 50 percent among the young. Many companies are relocating to other countries as a result of over-taxation. Meanwhile, the once booming tourism trade has taken a hit because of refugee arrivals. Last week, it was announced by Greece's official statistics agency that the debt-stricken nation had dipped back into recession. 

    According to the former finance minister of Greece, Gikas Hordouvelis, the situation is "now more dangerous than it was last summer."

    "Then it [reforms] was a question of the political will of a few people, now it's a question of implementing reforms and working hard, and if a government doesn't believe in them and implements them begrudgingly, progress becomes very difficult," he said, according to The Guardian.

    The measures in question become more and more explosive as time passes. As Greek ministers expect the IMF to "become more reasonable", the IMF itself expects Greece to implement measures worth €9 billion (£6.96 billion), or 4.5 percent  of GDP, if it is to meet an agreed budget surplus of 3.5 percent in the years ahead. To make a long story short, Greece won't be able to do that, unless its debts are relieved or its pensions are cut. While the former outcome is deemed unthinkable for the IMF, pension cuts are out of the question for the Greek government.

    So Greece's exit of the eurozone (the so-called "Grexit") is seen by bankers and businessmen as a way to solve problems and is being discussed more and more openly. The probable effect of Grexit remains largely undetermined, as some predict an extreme boost to exports, tourism and the national economy while others foresee a dramatic fall in the living standards of Greek citizens. More worryingly, if it's combined with the UK's proposed exit of the EU (Brexit), Grexit would most likely cause catastrophic and mostly unpredictable consequences for the European Union, potentially leading to the collapse of the EU in its entirety.


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    International Monetary Fund, Greek debt crisis, Brexit, Grexit, Gikas Hordouvelis, EU, Greece
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