Friday, March 06, 2015

Blog #4 Running on empty

Alexis Tsipras managed to get the four-month extension he asked for, however there were still things to be settled between the IMF and the Greek Government. Even though there is an illusion that the economy has gotten better, since the cafes are full and there are people all downtown Athens, it has been the same.
During the year of 2014 there was some growth, but it was nothing but a false alarm. The percentage of the GDP has fallen because of the elections that happened in January.
Because, of all that has happened in Greece these past few months the economy has been affected. There are three main ways it has been affected as. Firstly, the “Grexit” as they call it, which is the exit of Greece from the EU, and the possibility that Greece may return to the Drachma caused a drain of deposit. Everyone has a reason to be worried. Secondly, domestic investors have set their projects on hold and foreign investors are scared away and refuse to start projects in Greece. Thirdly, because of all the cutoffs Greece is unable to pay off the bills. These “bills” are as high as 5 billion to the IMF. Fortunately, despite all these negative affects, tourism in Greece is still high!
There are definitely many issues that have to be solved in order for Greece to see growth. It may be a positive thing that they got the extension, but they need to pay off at some point in order to remain in EU. I am not sure how Tsipras and Finance minister, Varoufakis are going to manage this, but IMF needs to see Greece pay off something in order to give them money again.

Eugenia Marantos 

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