The Greeks have never been able to stick to it’s alloted 60 percent debt limit. It’s huge public deficit and debt has raised concern within the 16 nation Eurozone. The current debt crisis, EU countries are up and cautiously watching how it will affect them as a whole. For Greece this is a national reputation management crisis
Greece’s debt crisis, there is great worry if the country will be able to refund its debt. As it happened to Dubai, UAE owing to last years economic pressures, the Greek government budget has plunged into greater deficit. Investors are now feeling uncomfortable and skeptical if the government can repay the debt.
If Greece fails to repay its debts the crisis shouldn’t be much of concern for the global economy. This will only weaken the strong euro and not cause the currency to collapse completely. Situation will be different if other European members like Ireland, Italy and Spain defaults, in such case countries will start pulling out of the Euro.
On the contrary Greece’s present problems need to be addressed in the proper context, so when we say Greece’s debt is critical, it’s not as critical that we term it as sovereign debt.
Before Greece’s debts effects pulls down the value of euro and stock markets all the way to Wall Street, wealthy European countries are chalking out some assured strategy to prevent Greece from defaulting. The earlier this is done the quicker a positive message is sent out to investors, and set the ball rolling to get the economy back on track.