Financing Greece and European Union Economy Article

Financing Greece and European Union Economy - Article Example Reports are that Greece wanted to ask the European Union for the write-off of a large part of its debt, something that the EU was difficult to swallow. This would mean the creditor nations to Greece essentially writing off a large part of its loans. It would solve the problem of the large debt of Greece crippling its ability to finance itself because of having to source funds to pay its loans, among other things. On the other hand, the write-off of the debt undermines the EU by sullying the balance sheet of the nations who had been lending money and providing the resources to try and make the Union work financially. In the integrated economy of the EU, every economy either boosts or drains the whole Union, and the problem of Greece, therefore, affects all countries in the EU. The problem is urgent too, owing to the way the problem of Greece, according to the US, likewise can have a long-term negative effect not just on the EU economy but on the American economy as well (Verlaine and O’Donnell 2015). The problem is that since Greece received aid in 2010 to shore up its economy and to bail it out essentially, the Greek economy has continued to flounder, so much so that since that time the economy has shrunk by 25 percent. Financing its debt, therefore, continues to cripple the already hurting economy, so the Greeks thought of asking the rest of the EU to condone its debt. That being rejected, the Greeks have turned around and asked for a refinancing of its loan essentially. That entails the conversion of its current loans, some of them, into bonds that the other member EU countries can purchase, and whose value is tied to the way the Greek economy performs. This move is the alternative to condoning the debt, and can potentially save Greece from going into default on its loans to the EU and the rest of the world.