Reforms for Greece or Investments from EU

• 05.12.2015, 17:16
•  Europe,  World

Greece’s government averted default Tuesday that could be a reason to leave Eurozone, but this is still not a solution for the economic crisis that country has faced since 2011. The risk of cash crunch within two weeks is very serous issue for the country if a bailout deal with its EU financiers will not be reached soon.

Radical Left side government of Greece managed to scrape enough cash on Monday in order to  repay 750 million euros of IMF loans, The Economic Times reports.

After so long and hard cooperation Greece squeezed some support from its European counterparts over debt talks, but the demand by Eurozone Finance Ministers towards key reforms is still not implemented, which is the main issue to get the final 7.2 billion euros tranche of the EU-IMF bailout.

The Eurogroup statement over Greek reforms said that the Group could see the progress, but it is still not satisfying the full demand. Also they acknowledged that more time and efforts are needed in order to bridge the gaps on the remaining open issues.

The Greek Finance Minister Yanis Varoufakis in his term added that the country faced an imminent crisis as it struggles to reimburse its 240 billion euro bailout. Although Greece government is trying not to disappoint its creditors paying the debts on time, the country’s economic situation gets worst off because of the reimbursement. In upcoming weeks the country has to pay another 1.5 billion euros to IMF and after a month another 3 billion euros to the European Central Bank.

Although Athens has been getting funds from the local and central governments, Germany and other European partners are still expecting and demanding regime of reforms from the capital that includes budget cuts from pensions and salaries.

According to EU economic affairs in case of rejection of budget cuts Greece has to propose alternatives.

The only alternative is the squeezing funds from the different levels of governments what is done by the country. Actually in terms of economics the budget cut is not a way of reform, it is just cost reduction. The real reforms should be done through investment in the special area of the economy that country depends on. Europe's mission should not only be demanding from Greece repayment of the debt (of course it should be done on time), but also supporting the country that will help Greece to overcome the crisis. The more the debt, the bigger gap is.