Greece/Minister/the Economy and Finance
| Greece/Minister/the Economy and Finance |
|The government department responsible for Greece's public finances.|
The Ministry of Finance is the government department responsible for Greece's public finances. between 2000 and 2009 it was known as the Ministry of Economy and Finance.
Eurozone membership in 2001 helped the Greek government to borrow cheaply and to finance its operations in the absence of sufficient tax revenues. However, the use of a single currency highlighted a structural difference between Greece and other member countries, notably Germany, and exacerbated the government’s fiscal problems.
The global financial crisis that began in 2007 exposed the true nature of Greece’s financial strife. The recession weakened Greece’s already paltry tax revenues, which caused the deficit to worsen. In 2010, U.S. financial rating agencies stamped Greek bonds with a "junk" grade. As capital began to dry up, Greece faced a liquidity crisis, forcing the government to seek bailout funding, which they eventually received with staunch conditions.
Bailouts from the International Monetary Fund and other European creditors were conditional on Greek budget reforms, specifically, spending cuts and higher tax revenues. These austerity measures created a vicious cycle of recession with unemployment reaching 25.4% in August 2012, catching the country in a well designed debt trap.
In 2015, Greece defaulted on its debt. While some said Greece simply fell into "arrears," its missed payment of €1.6 billion to the International Monetary Fund (IMF) was the first time in history a developed nation has missed such a payment. Greece joined the Eurozone in 2001, and some consider that the Eurozone partly to blame for Greece's downfall.