Elliott Wave Courses | by ForexCycle.com | Sunday, 12 July 2015 07:57 UTC
By Elliott Wave International
Editor's note: You'll find the text version of the story below the video.
In December 2009, Greece was encumbered with debt amounting to 113% of GDP (nearly double the Eurozone limit of 60%).
In May 2010, Eurozone members and the IMF agreed to a €110 billion Greek bailout.
The can was kicked down the road.
Today, Greece's debt-to-GDP is nearly 180%!
Yet on July 5, Greek voters loudly said "No!" to the austerity reforms proposed by creditors. In other words, it was a "yes" vote to (once again) kick the financial can down the road.
The austerity package would have included pension cuts and value-added tax increases. Greece's prime minister wants a less harsh bailout deal, and hopes the "no" vote will provide leverage in negotiations with Eurozone creditors.
But Greece still owes €240 billion to its creditors. Any repayment plan will likely involve sacrifice. What's more, Greece has suffered a 25% GDP decline since 2010.
The often-kicked "can" may have run out of road.
No matter how Europe's financial authorities respond to Greece's vote, the fear of default is likely to spread beyond that country's borders.
Whether Greece exits the Eurozone or not remains to be seen.
One thing appears certain: the world will soon shift its attention from the Greek debt drama to one that plays out on the global stage.
Global Insight: Europe's Debt-Dependent Economy
Europe is in the world spotlight this month, with Greece's future hanging in the balance. But Greece is just one part of the problem. Enjoy an excerpt from EWI's Brian Whitmer from the June European Financial Forecast to see just how precarious Europe's financial situation has become.
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