what cause Greece to borrow money from international monetary fund(IMF)?
because greece unable to recovery after WW2 and had to borrow money from IMF to recovery?
- Airpole.Lv 74 years ago
The involvement of IMF in lending money to Greece has nothing to do with WWII. The need arose from the illogical squandering of national reserves over the period of the last 20 years or so. The undertaking of 2004 Olympic games and the subsequent world financial crisis was the cherry on the cake.
Also stricter controls by the EU led the country in difficulties and the need of borrowing money became apparent.
What is really suffocating the country is the interest that money was borrowed for. Too high and shorter time to pay back.
- Anonymous4 years ago
Greece was always the poorest country of the group, with the weakest controls over its domestic finances. Its government would spend beyond its means and make up the difference by borrowing — or printing — a lot of money. (Borrowing created a huge build-up of debt; printing caused the Greek currency, the drachma, to consistently weaken, or devalue, against stronger currencies like the Deutschmark.)The result was that Greece’s borrowing costs plunged: it became much easier and much cheaper for Greece to borrow money, with the predictable result that Greece did exactly that. Banks and other investors from all over Europe lent billions upon billions of euros to Greece, and in turn Greeks used that money to live very well…well beyond their means.Greece consistently spent, every year, much more than it took in, in taxes, and it had no real ability to ever repay the money it was borrowing.
- madalineLv 44 years ago
Thats a good question and I hope you will get valuable answers