Update of Greece Economic Crisis in 2016

By Staff Writer

Jan 12, 2016 07:08 PM EST

Greek depression started in 2009 as part of Eurozone crisis. Among five other countries, Greece was the worst case, and the crisis lead to political tumult. The country now faces 2016 with a disagreement with its creditors over pension fund.

Following its failure to repay IMF loan, Greek government negotiated a third bailout program in June 2015 that entailed capital control and economic reform. However, rejection from parliament and rebellion from some politicians in the ruling party disrupted the implementation of bailout program. The government and parliament then initiated the referendum to vote for bailout program.

Majority of Greek citizen rejected the bailout program in July referendum, resulting a turmoil and uncertainty about Greece future in the Eurozone. In August 2015, Prime Minister Alexis Tsipras announced his resignation and declared an election in September to form a new government.

In the September election, Syriza won the election and leader of Syriza, Alexis Tsipras formed a government. The new government launched the delayed bailout package in November. However, entering 2016 some are pessimistic about Greece condition to survive the economic crisis including George Soros.

Soros said blatantly in an interview with Wirtschaftswoche magazine, as quoted by The Greek Reporter, "Greece will never recover as long as it is a member of the Eurozone."

"When the Greek crisis broke out for good in 2009, the EU, under the leadership of Germany, gave a helping hand, but Greece had to pay a high price," said Soros, the famous investor. "The country was asked to pay excessively high interest rates making it impossible to serve the Greek debt. Unfortunately, the Germans repeated the mistake during the last negotiations. Again, they imposed conditions that brought [Greece] closer to bankruptcy. Greece will never be able to repay its debt."

However, France, one of the European creditors on Sunday convinced that Greece is able to tackle the debt issue quickly. After a meeting with his Greek counterpart, Reuters reported French Finance Minister Michel Sapin told reporters, "I was convinced ... that the Greek government is determined to respect its commitments on all of the subjects."

Last week, Greece was in disagreement with its creditors over a government pension fund. The Telegraph reported that Greece would not slash expenditure on  pension fund as part of a reform plan submitted to international lender. The government pension fund was one issue that become main concern for lenders for Greek economic sustainability.

Greece will have to cut the pension fund as one of the condition to achiee its economic reform. However, protest from pensioners become the burden for government under Alexis Tsipras to implement the measures.

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