We’re gonna need a bigger bailout

Greek economy may need $200bn to survive

Financial giant Goldman Sachs is warning that the original $60bn bailout package offered to Greece by the European Union and the International Monetary Fund will not be enough, and that the country will need closer to $200bn over the next three years to solve its financial crisis. “I suspect that some haggling is now going on between the IMF and the eurozone on the burden sharing of a bigger programme, but I rather doubt that the Europeans can do more than the already announced $40bn for the first year,” wrote Erik Neilson, Goldman’s chief European economist in a note to clients. A surge in the yields charged on Greek debt has analysts warning that it may be about to default on loans and that financial restructuring may be the only option if the country is going to repay it’s $400bn national debt. However, Germany has resisted giving Greece any more money unless it drastically changes its economy and reigns in public spending. Cuts to government funding have been extremely unpopular and resulted in protests, but the Greek prime minister is pressing ahead with a program to shave four per cent off the annual deficit. Still, analysts are afraid that the Greek crisis may have severe ramifications and could spread to other countries in Europe.

The Guardian

Looking for more?

Get the best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.