After Greece misses another deadline for payments to unlock funding necessary for resolving the pension and labor market issues plaguing the economy. According to the currency bloc of finance minister meeting in Brussels “the government of Alex Tsipras has yet to comply with the terms attached to the emergency loans that have kept the country afloat since 2010”, who are working on a comprehensive deal that would pave the way to unblock new loans to Greece. However, Greece owes more than 7 billion euros in bond payment due in July. Pressure is increasing to find a solution, according to EU Economic Affairs Commissioner Pierre Moscovici in order to successfully handle the situation “we have to avoid delays”. Euro Zone Ministers hope to find a comprehensive deal to unblock new loans to Greece.
While Greece has implement the mandated reforms to its energy and labor markets, they have resisting the calls for additional pension cuts. At the moment, Greece spends 13.3 percent of its GDP on old-age pensions, more than any other country.
Aside from possessing a debt 176.9% times the country’s GDP, Greece is also facing other economic issues. In the last quarter of 2016, Greece saw increased unemployment and lack of deposits in there banks. According to, professor of economics at NYU, Nicholas Economides, recovery is being significantly delayed by politics. There is a lack of trust amongst the current government to make necessary changes.
Without more loans and lack of further reform, Greece is approaching a repeat of 2015, which pushed the indebted state near the point of collapse. Many believe the only options left are debt forgiveness or debt restructuring. If things get more serious Greece faces a potential forced exit from the Euro. A major different between the crisis in 2015 and now is the potential for a post-Brexit resurgence of nationalism amongst EU nations to make pushing out Greece more appealing than it previously has been.
Eurogroup chairman Jeroen Dijisselbloem said more talks are to come and it is hoped the problems can be resolved at the next Eurogroup meeting on April 7th. However, there is “no promise” that all the work and efforts necessary to resolution will be done by then.