(WTNH)– News 8 is watching the situation in Greece today because it is deadline day for the country to make good on its nearly $2 billion euro debt.
Greece has until 6 p.m. our time to either pay up or default. And it sounds like the country is likely to default unless Europe steps in and helps.
Greece has always done its own thing. Thousands of years ago, they invented philosophy and democracy, which was nice. In the past twenty years, it’s meant some bad financial decisions, which is not so nice.
Greece joined the Eurozone in 2002, then the rest of Europe found out Greece lied about its budget deficit. Europe demanded Greece bring down its debt, so the government cut its spending a lot. The trouble with that is it turned out the Greek economy was largely based on Government spending, so the economy kept slowing and slowing.
The Eurozone approved several bailouts to try to jump-start the economy, but Greece just used the new money to pay off old debts. The economy never improved, unemployment got worse.
Today is the deadline to pay off about $1.8 billion. Greece has shut down all its banks and promised a vote on repayment Sunday. The only good part of this is everybody saw this coming years ago, so most of Wall Street got out of Greece. Unless you own a lot of Greek bonds, this is not going to ruin you.
Yes, the markets all dropped about two percent yesterday, and yes, there could be more volatility in the markets in the days to come because no one is sure what will happen next, but this is only going to be a bump, not a cliff for your 401K or your kid’s college fund.
If anything, a bigger problem comes a month from now when we hit the deadline for Greece to pay back twice as much as it owes today.