Budget cuts, tax hikes, and pay cuts are just a few of the measures taken by the Greek government during the economic crisis that has been hovering over the country since 2009. Greece borrowed money to help offset the deteriorating financial situation it is in. One of the main concerns is that the interest rate on the money borrowed has Greece spinning its tires in the mud as the problem continues to sink the country deeper. Greece is currently reaching out for a bailout loan to help further economic recovery efforts.
Recent negotiations between Greece and its troika of foreign lenders ended with an agreement on the measures Athens must take in order to receive further funding to help hoist the country out of debt and into a state of recovery. Negotiations include more layoffs in the civil service sector. It will equate to thousands of necessary job losses. It is a hard blow for the people who will be affected by it.
Greece had a debt burden of 160% of the gross domestic product at the end of 2012. Prime Minister Antonis Samaras came away from the meeting with the troika with great hope that the financial crisis in Greece would be a thing of the past in approximately two years. Greece was offered two previous bailouts to be given in installment plans if certain conditions were met. Unfortunately, the conditions were not met in a timely manner and re-negotiations were necessary.
Debtors of other loans granted to Greece agreed to a lower interest rate in order to help hasten financial recovery. The Greek national debt has steadily risen to more than 369 billion euros. In order to lower the debt and begin to make progress, Greece must immediately begin to cut jobs and enact other conditions of the bailout loans.
The number of civil service workers to be laid off over the next year is fifteen thousand. Among the workers to be laid-off first are those nearing retirement and those who have been cited with disciplinary actions in the past. Many of those positions will be filled with younger workers. This is expected to help the country’s economic growth within twelve months.
Tax evaders in Greece will likely find themselves on the wrong end of the law as the government works to weed them out and press for payment. Tax evasion is a widespread problem in the country and the government has been lax in enforcing the tax laws. The past due tax payments will help lower the debt tremendously and enforcement is part of the agreement if the Greek government wishes to receive the proposed bailout money.
The current standing of the Greek credit rating stands at the bottom of the pile. It is considered the country with the highest European risk to creditors. If the country stays on track and pays its debts on time, the rating will eventually rise and help further the country’s recovery efforts. Citizens of the country have protested the lay-offs of civil servants in the past; however, it is of utmost importance to salvaging the country and bringing it out of its financial ruin. Prime Minister Samaras is committed to seeing it through.
This article was contributed by Sheldon Armstrong and his good friend Donald Turner, a financial expert who looks forward to sharing his knowledge on INFOtainment News! They write this on behalf of KEL Credit Repair, your number one source of credit repair information. Check out their website at www.kelcreditrepair.com for more information about their great services!