Greece Sovereign Debt Crisis Literature & Language Essay (Essay Sample)

Greece Sovereign Debt Crisis
Name
Institution
European Sovereign Debt Crisis
The European sovereign crisis refers to the multi-year debt crisis that has been occurring in the European Union since the end of 2009. The crisis affected the following Eurozone member states, namely Greece, Spain, Ireland, and Portugal. These countries were unable to refinance or repay their government debt without external help (Lynn, 2010). This is besides failing to bail out over-indebted banks without the help of the International Monetary Fund (IMF), the European Central Bank (ECB), or other Eurozone countries. In light of these observations, this essay outlines the five main events that characterized the sovereign debt crisis in Greece since 2009.
Discussion
The Eurozone debt crisis began when Greece disclosed that its budget deficit was 12.7% of the gross domestic product (GDP). The cost of financing government debt had increased significantly in Greece by November 5, 2009 (Tamakoshi & Hamori, 2015). The situation forced the International Monetary Fund (IMF) and the Eurozone countries to develop a financial strategy to rescue Greece. On May 2, 2010, the International Monetary Fund and the Eurozone countries agreed on a €110 billion loan for Greece. Greece, however, was expected to implement several harsh austerity measures that did not go well with its citizens.
A week later, a rescue package worth €750 billion was drafted and approved by Europe’s finance ministers on May 9, 2010. The aim of the rescue package was to ensure financial stability in Europe by establishing the European Financial Stability Facility (Tamakoshi & Hamori, 2015). The Greece bailout plan was the beginning of a series of financial rescue packages aimed at supporting the recovery of the Eurozone economies. As such, the €85 billion was approved in Ireland in November.