Greece at an Economic Crossroads, Effects Tourism
11 million citizens in the Balkan Peninsula are living in a country that has gone bankrupt, leaving no signs of recovery in the near future
Eleven years ago, Greece hosted the 2004 Summer Olympics in Athens and the eyes of the world were on the country. Little did everyone know, the countries financial situation was in turmoil and Greece was on the cusp of two bailouts.
In 2010, Greece accepted a €110 billion bailout loan from the European Union (EU), only to get bailed out a year later (2011) with a second bailout worth €130 billion, bringing their total loans to €240 billion.
Greece again went bankrupt in 2014, leaving them at a crossroads with no one offering to lend any more money to the struggling country. As mentioned by CNBC, if Greece doesn’t recieve any aid until April 20th, they will run out of money.
Ronald Gunderson, Senior Economics Professor at Northern Arizona University for over 30 years doesn’t believe that Greece can recover on their own strength.
“They will need assistance from the other euro zone partners unfortunately,” said Gunderson. “Their debt is so high, in order to do it on their own, they would need to impose extremely harsh austerity measures on their own people.”
These measures that Professor Gunderson mentioned, have already proven to be highly unpopular with the Greek citizens, and the political cost would make it highly improbable that the Greek government could survive politically at this point.
On the other hand, the lack of confidence in the country’s economy has also made it just as unlikely that the government will be able to borrow funds to escape from the economic crisis. Therefore, neither of the traditional approaches to resolving the debt crisis is likely to work in Greece, and the country will need a continuation of an international bailout to recover.
In comparison to that of the 2008 bailout with the United States, the primary difference is that in Greece, there is a lack in the economy’s ability to pull itself up and be able to repay its debt; therefore, the nation is unable to attract investors to support the country’s business and economic activities. That is not the case in the U.S. today.
Although it is true that the U.S. economy also has seen an explosion in the national debt, investors from around the world are still willing to buy U.S. debt, and there is not a fear that the U.S. government will default on its obligations now or in the future. Therefore, the range of options available in the U.S. is much broader than it is in Greece.
Jamal Wells, senior at NAU and former study abroad student in the United Kingdom and Greece was candid in describing his experience in the debt riddled country.
“Studying at the American College of Greece for a couple of weeks was interesting,” chuckled Wells. “The country isn’t anything like you imagine it is. When I visited some of the old stadiums that were used for the Olympics, I was shocked to see them abandoned.”
With the financial status of Greece in turmoil, tourism has taken a hit with travel agents advising against visiting there due to protests. So students looking to travel to Greece this upcoming summer might have to be postponed if the situation gets worse.
Time will only tell if Greece gets bailed out once again, but all signs are pointing towards it. Until then, we just wait until the fateful day of April 20th when the country is expected to run out of money.
