Greece facing financial problems in the recent times is not a new story to anyone. But it has crashed out of the euro, which is worrying one and all. This intervention has come only after Greece is about to sign a new rescue deal with the creditors.
Draghi, who recently had a meeting with Greek Finance Minister Yanis Varoufakis in Washington stated “The short-term danger of contagion [from a Greek exit] is difficult to assess, but we have enough buffers in place. And even though they were designed for different circumstances, they are sufficient. But we are entering uncharted waters.” Draghi was confident about the progress in making a well-functioning policy dialogue between Greece and the lenders namely EU commission, ECB and IMF.
IMF had earlier called for EU to decrease their list of demands while doing the debt talks with Greece. However, the fears loom over the fact that time is running out in order to reach a conclusion in the deal. Poul Thomsen, the head of the IMF’s European Department called for the slimming down of reforms being demanded from Athens in lieu of the important 5.2 billion pounds.
Draghi, however, said that the objective of the talks was to reach, “a comprehensive package within which the policies can be monitored”.
It was last week that IMF called for a delay in debt payments that were due the next month. The Greek Ministry has declined all the claims, but it is strongly believed that the Finance Minister of Greece, Varoufakis requested for this delay.
The details of the finances of Greece are not clear to the world, but there are fears that the country could run out of money to pay for its welfare bills and public sector wages. This would happen if the country is forced to make the debt repayments.
Trouble looms over the future of Greece if it is asked to pay back its debts soon. We will have to wait and see how the Greek government deals with the crises.