After 10 hrs of overnight marathon meeting finally the leaders of European Union came to a conclusion on how Greece can be helped to overcome the debt crisis.
So, the decision was made that Greece will undergo a "controlled default".
The leaders put a word to the leading banks to bear as much as 50% of loss on their bond holdings with Greece. In addtion, Greece will receive more rescue loans (~100 billion euros) to repair their economy. Although this amount is less than the one decided earlier, it is expected that along the relaxation on bond holdings with banks, Greece should now be able to overcome the subsidised debt crisis.
It is said that such a decision is taken to avoid first EU default. The decision apparently shows positive signs at present if market activities are to be believed. But it brings in few questions which might be asked in future.
The decision might be responsible to set up a trend to overcome crisis situation.How will banks react if similar crisis appear in future? It will put the the credibility of all the nations on stake. The banks will try their best to avoid such crisis situatutions. Further how will EU tackle similar crisis situation which is standing at the doors of other european countries like Italy and Spain who bear much higher debt than Greece.
So, the decision was made that Greece will undergo a "controlled default".
The leaders put a word to the leading banks to bear as much as 50% of loss on their bond holdings with Greece. In addtion, Greece will receive more rescue loans (~100 billion euros) to repair their economy. Although this amount is less than the one decided earlier, it is expected that along the relaxation on bond holdings with banks, Greece should now be able to overcome the subsidised debt crisis.
It is said that such a decision is taken to avoid first EU default. The decision apparently shows positive signs at present if market activities are to be believed. But it brings in few questions which might be asked in future.
The decision might be responsible to set up a trend to overcome crisis situation.How will banks react if similar crisis appear in future? It will put the the credibility of all the nations on stake. The banks will try their best to avoid such crisis situatutions. Further how will EU tackle similar crisis situation which is standing at the doors of other european countries like Italy and Spain who bear much higher debt than Greece.
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