Triangle Greeks worry about homeland's financial future
Posted June 30, 2015 8:16 p.m. EDT
Updated July 1, 2015 5:41 p.m. EDT
Raleigh, N.C. — A letter from Greece brought Foti Fotiu even closer to his homeland's economic crisis.
One of his closest friends wrote that he lost his home.
"The people of Greece are suffering," Fotiu said. "I'm afraid that there's going to be a lot of demonstrations on the streets. I'm afraid the situation is going to cause fights among the Greek people."
Fotiu spoke about his country during a Greek festival planning meeting at Holy Trinity Greek Orthodox Church on Wednesday. The usually light-hearted and energetic gathering took on a somber mood as many worried about Greece's economic chaos.
Greece's debt crisis
Greece on Tuesday became the first developed nation to miss a payment to the International Monetary Fund, an organization of 188 countries that ensures the stability of the international monetary system. That system, which comprises of exchange rates and international payments, enables countries and their citizens to conduct bank transactions.
The country’s recent financial troubles started in 2009 when its credit rating was downgraded amid fears the government would default on its debt after leaders admitted to understating deficit figures. In recent years, Greece received billions in bailout loan funds in exchange for stronger austerity measures – debt control guidelines that help reduce government spending. Those guidelines included deep budget cuts and tax increases. Despite the extra funding and strict spending rules, Greece’s debt and unemployment rate continued to rise.
In February, Greece negotiated a four-month bailout extension in exchange for dropping some anti-austerity measures and taking part in a reform program approved by other European countries.
Seeking another extension, Greek leaders were in talks with European finance ministers, but those discussions fell apart this week. Fearful that the country could become the first to fall out of the euro, the currency used by 19 of the European Union’s 28 countries, Greeks have rushed to the country’s banks to take out cash, forcing the country to close its financial institutions. Residents have been restricted to ATMs, where they can take out only $67 a day. Sending money abroad or making international payments requires special permission.
Greek Prime Minister Alexis Tsipras called for a referendum vote on July 5 that will allow residents to decide whether to accept stricter austerity measures in exchange for more bailout funds. Experts say the vote will essentially determine whether Greece stays with the euro. Tsipras is pushing for residents to vote 'no' in hopes that it will help him negotiate a better deal with the country's creditors.
On top of the $1.8 billion owed to the IMF, Greece has a $3.8 billion payment due to the European Central Bank in late July. Missing that payment, experts say, would likely place the country in default.
President Barack Obama on Tuesday said Greece’s financial problems are a “substantial concern” and that a default would have little impact on the U.S. economy, but would slow economic growth in Europe and across the globe.
Worry among Triangle Greeks
Greece's financial troubles may have little impact on U.S. markets, but many Greeks who live abroad either have money in their homeland's banks or, like many at Wednesday's meeting in Raleigh, have relatives there.
"They have to solve this in Greece," Beba Zevgolis said. "They have to solve the problem, but a lot of people here have relatives that are living there and they're concerned. It's their livelihood."