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The Greek debt crisis, simplified
Confused about what’s going on in the EU? Here’s the story — in human terms
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There’s been a lot of discussion about the Greek debt crisis in the news lately, and with multiple international relationships and economic factors involved, it can be difficult to grasp the overall situation. In the spirit of making complicated things simple, we’ve put this drama into a short play, so you can get the birds-eye view — possibly in the amount of time it would take you to finish your coffee this morning.
Greece is a man…with a very big family. He supports many of them who are unable (or unwilling) to work.
But his income cannot support them all, so he takes out a credit card.
However, Greece was a credit risk. He is a middle-income earner with a habit of overspending, and he struggles to extract enough money from his family to help pay the bills.
But then Greece manages to marry into a wealthy family (aka the European Union). This family knows some of Greece’s financial troubles, and expresses some concern about it, but he manages to convince them that he has reformed and thus is worthy of joining the family.
Greece gets married; he and his spouse open a joint bank account. He uses a loan from his new family to pay down some of his debts. His creditors feel more comfortable now that Greece has a co-signer, and they increase his lending limit. So he begins borrowing more and more.
However, the company Greece works for has financial troubles, and he takes a pay cut. His creditors get scared and decide not to loan him any more money. Greece’s new family steps in and gives him a loan to keep him afloat – against the advice of their matriarch – but most of it goes to paying down his debts, not toward supporting his family.
Greece takes the loan, but meanwhile, his own family remains unemployed and the company he works for still can’t pay him his old salary. So, five years later, when his loan comes due, he cannot pay it back. When Greece can’t pay his debts, the lenders turn to his new family, but they don’t want to bail him out again. This causes the lenders to panic and they hike Greece’s interest rates, making it all the harder for him to pay back his debts.
With Greece deep in debt, his in-laws are very unhappy with him, but they are also concerned that if they divorce him, it might hurt their business.
Greece’s mother-in-law (Germany) was the primary contributor to the loan, and she feels that she has supported Greece long enough – and that he should have been tougher with his family. She has determined that if she and the rest of her family are going to provide another loan, she wants Greece to keep that money in a separate account, and she wants him to sell off some of his assets to help pay down the debt.
But much of Greece’s family is now both unemployed and facing drastic reductions in their support, so they are putting pressure on Greece to negotiate better terms to their agreement. In fact, his family is in worse shape than America during the Great Depression. They don’t like the terms of the new loan, but they agree, hoping that by the time it’s due, their jobs will be paying more, and they’ll be able to repay it.
Now that you’re caught up on the Greece debt crisis — in human terms — go ahead and dig in deeper in the news coverage to it to find out more (real-life) details of what happened. Or, follow the drama as it unfolds over the coming weeks and months.
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