Who owns greek debt 2011

Has so far weathered the financial crisis and kept Greece within the currency, but there are serious fears about the future of the currency should Greece exit. Exposure: Almost all the eurozone countries have lent money to Greece, leaving them "exposed" if Greece can't pay. The eurozone's largest economies, Germany and France, are owed the most but countries with smaller or less robust economies, such as Slovenia and Spain, would likely suffer more.

Grexit: Short for "Greek exit" from the eurozone. First coined by financial analysts in and now a real and looming possibility. Not to be confused with "Brexit" - the possibility of Britain leaving the EU. Greferendum: Another handy portmanteau - short for "Greek referendum". It was a triumph for Prime Minister Alexis Tsipras - though any new bailout deal is likely to mean more painful austerity. Haircut: A reduction in the value of a troubled borrower's debts. European governments are hoping to avoid more state bailouts to prop up the banking sector, and to limit the fallout should any bank collapse.

Bailed out Franco-Belgian bank Dexia warned on Thursday it risked going out of business. It suffered a net loss of Dexia, which accepted a state-led break-up and the nationalization of its Belgian banking arm in October and is now little more than a holding of bonds in run off, booked a 3.

French investment bank Natixis, rescued from near-collapse during the financial crisis by a government-backed merger of its retail cooperative parents, reported a milder-than-expected 32 percent decline in quarterly profits. Otherwise, it would not receive the EU loan of 86 billion euros. It lengthened the terms, thus reducing net present value.

Greece would still owe the same amount. It could just pay it over a longer time period. The United Kingdom demanded the other EU members guarantee its contribution to the bailout. On September 20, Tsipras and the Syriza party won a snap election. It gave them the mandate to continue to press for debt relief in negotiations with the EU. However, they also had to continue with the unpopular reforms promised to the EU.

In November, Greece's four biggest banks privately raised The funds covered bad loans and returned the banks to full functionality. Almost half of the loans banks had on their books were in danger of default. Bank investors contributed this amount in exchange for the 86 billion euros in bailout loans. The economy contracted 0.

In March , the Bank of Greece predicted the economy would return to growth by the summer. It only shrank 0. They were reluctant to call in bad debt, believing that their borrowers would repay once the economy improved. That tied up funds they could have lent to new ventures. It planned to use the funds to pay interest on its debt. Greece continued with austerity measures. It passed legislation to modernize the pension and income tax systems.

It promised to privatize more companies, and sell off nonperforming loans. In May , Tsipras agreed to cut pensions and broaden the tax base.

In return, the EU loaned Greece another 86 billion euros. Greece used it to make more debt payments. Tsipras hoped that his conciliatory tone would help him reduce the But the German government wouldn't concede much before its September presidential elections.

In July, Greece was able to issue bonds for the first time since It planned to swap notes issued in the restructuring with the new notes as a move to regain investors' trust. On January 15, , the Greek parliament agreed on new austerity measures to qualify for the next round of bailouts. On January 22, the eurozone finance ministers approved 6 billion to 7 billion euros. The new measures made it more difficult for unions strikes to paralyze the country.

They helped banks reduce bad debt, opened up the energy and pharmacy markets, and recalculated child benefits. On August 20, , the bailout program ended. Most of the outstanding debt is owed to the EU emergency funding entities. These are primarily funded by German banks. Until the debt is repaid, European creditors will informally supervise adherence to existing austerity measures.

The deal means that no new measures would be created. How did Greece and the EU get into this mess in the first place? The seeds were sown back in when Greece adopted the euro as its currency. Greece had been an EU member since but couldn't enter the eurozone.

Its budget deficit had been too high for the eurozone's Maastricht Criteria. All went well for the first several years. Like other eurozone countries, Greece benefited from the power of the euro. It lowered interest rates and brought in investment capital and loans.

In , Greece announced it had lied to get around the Maastricht Criteria. The EU imposed no sanctions. Why not? There were three reasons. France and Germany were also spending above the limit at the time. They'd be hypocritical to sanction Greece until they imposed their own austerity measures first. There was uncertainty on exactly what sanctions to apply. They could expel Greece, but that would be disruptive and weaken the euro.

The EU wanted to strengthen the power of the euro in international currency markets. As a result, Greek debt continued to rise until the crisis erupted in Greece could have abandoned the euro and reinstated the drachma. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. National Debt Explained: History and Costs. Macroeconomics What Are Austerity Measures? Partner Links. Related Terms Learn About the European Sovereign Debt Crisis The European debt crisis refers to the struggle faced by Eurozone countries in paying off debts they had accumulated over decades.

It began in and peaked between and The Greek Drachma was an ancient currency unit used in many Greek city-states. Grexit Grexit, short for "Greek exit," refers to Greece's potential withdrawal from the eurozone and the reintroduction of the drachma as its currency. Fiscal Imbalance Definition Fiscal imbalance is a situation in which the future incomes streams for unit of government do not balance the future debt and spending obligations. What Is Article 50?

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