How Can Global Institutions Help Solve Global Problems?

Greece became the center of Europe's debt crisis after the New York Stock Exchange also known as "Wall Street" nearly crashed in 2008. This sent the global financial mar-5 kets into chaos which resulted in Greece announcing in October 2009 that it had been inaccurately stating its deficit figures for years, raising alarms about the overall health of Greek finances. As a result Greece was no longer able to borrow within the financial markets. By the spring of 2010, it was headed towards bankruptcy, which threatened to start a new financial crisis.

To avoid a complete disaster, the International Monetary Fund, the European Central Bank and the European Commission issued the first of two international bailouts for Greece which would eventually total to more than € 240 billion.

However, the bailout came with conditions. Lenders set up harsh austerity terms which meant big budget cuts and large tax increases. They also required Greece to fix its economy by cutting lots of government positions, ending people's ability to avoid taxes, and making Greece an easier place to do business.

Why is there still a crisis if Greece has received billions of Euros in bailouts?

The plan was that the money would "buy" Greece some time to fix its finances and calm market fears that the euro union could break up. Although this has helped in some aspects, in the past five years the economy has shrunk by 25% and unemployment.is also about 25%.

The bailout money has mainly gone towards paying off Greece's international loans, rather than helping the economy.

And the government still has a lot of debt that cannot be paid off unless the economy starts to recover and continues to recover. Greece's relationships to Europe are in a fragile state, and several of its leaders are becoming impatient and unlikely to tolerate the slow progress that has often occurred in the past. Under the bailout agreement, Greece must continue to reform many of its systems, many of which should have been put in place years ago.