Blog #4 Greek deal to cut spending does not end debt drama

Greece has made a deal to hopefully ease the debt crisis and prevent an eventual meltdown of the world financial system.  They have agreed to make some deep cuts in government spending and jobs that will help to save the country from default.  Greece needed to make this deal in order to  receive 130 billion euros of bailout money that is needed to pay off bonds worth 14.5 billion euros that are due in March. The country would be in default if it can't pay them off and could set off a financial crisis in the world financial system. The European ministers say that the cuts are not going to be enough and need to be taken a bit further. They say that Greece needs to find a way to cut another 325 million euros. The deal so far calls for a 22% cut in the monthly minimum wage and the loss of 15,000 jobs in civil service. It will also end job guarantee provisions. These austerity measures are necessary to be given the bailout money needed. Greece is also going through deals with private banks and groups that make them take over 1/3 of the countries debt that will help out. The country's economy has been in really bad shape for years losing jobs left and right. The deal will help ease fears of a financial meltdown, but the leaders still say it's not going to be enough.

This event is important because it affects the world financial system which is key in the world economy. If a country has to default it will send the markets spiraling down.They directly affect each other.  The social problem is that Greece and the world economy is in bad shape. This is a social problem because it affects all aspects of people's lives. It affects food prices, gas prices and everything else that people need to live. If they can't afford these things then it's a problem. The downfall in the economy is causing all sorts of problems with job losses which is a social problem. This event where they came up with a deal to get the bailout money will hopefully save people from losing jobs and just making the economy stable again.



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