CorpComms Magazine

What's the story?

Greece has long relied on borrowed money to stay solvent. With the recession, tax revenues fell as demands on the welfare state grew. Investors demanded higher interest rates because of the heightened risk. The economy began to seize up causing credit rating agencies to downgrade Greek debt to 'junk'.

Who you gonna call?

Greece turned to the debt busters - the International Monetary Fund - for help. And by help, I mean up to €120 billion (£105 billion) of bailout loans. But the rescue package has strings attached. Cautious lenders have demanded austerity measures.

So, under the new measures, what's a Grecian earn?

A darned sight less than he did last month. The measures freeze public sector wages, slash state pensions, hike consumer taxes and raise the retirement age from 61 to 63.

How have the public reacted?

With anger. A general strike against the austerity cuts and hikes turned to riots on the streets of Athens as thousands of protestors laid siege to the Greek parliament. Three bank workers were killed when a protestor threw a firebomb into their building.

What did the markets say?

They definitely made a Drachma out of a crisis. The devaluation of Greek debt clearly spooked investors and stock exchanges worldwide took a tumble. As rioting escalated in Athens, the euro fell to its lowest level in over a year.

Is this the only way?

There is a fear that, while staving off immediate bankruptcy, the measures will prevent the Greek economy from growing. But because of the country's membership of the euro zone, Athens cannot cut interest rates any further or encourage growth by devaluing its currency.

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