Greece

From the days when monarchs over-borrowed for their mercantile adventures, to Argentina’s recent failure to pay its creditors, countries have long run into trouble paying back what they have borrowed. Spain’s 16th-century king, Philip II, reigned over four of his country’s defaults. Greece and Argentina have reneged on their commitments to bondholders seven and eight times respectively over the past 200 years. And most countries have defaulted at least once in their history. But what precisely happens when countries stop paying what they owe?

Ever since the euro crisis erupted in late 2009 Greece has been at or near its heart. It was the first country to receive a bail-out, in May 2010. It was the subject of repeated debate over a possible departure from the single currency (the so-called Grexit) in 2011 and again in 2012. It is the only euro country whose official debt has been restructured. On December 29th the Greek parliament failed to elect a president, forcing an early snap election to be called for January 25th. The euro crisis is entering a new, highly dangerous phase, and once again Greece finds itself at the centre.

Alexandra Nikolovieni, 55, lost her job escorting young children on a school bus four years ago and has not been able to find another one since. To help financially, her daughter and her son-in-law, who have two children, moved into her house. But now they have lost their jobs, too. Ms. Nikolovieni, who volunteers at a food pantry in this suburb of Athens, says that every month she sees more and more people like her, qualifying for bundles of groceries and picking out used shoes for themselves or their children. “Are things getting better?” she said.

Greek agita is back. Or is it? After a two-year spell during which investors eagerly snapped up Greek assets, the prospect of new elections and the arrival of a tough-talking new prime minister are once again roiling European markets, the International New York Times DealBook blog reported. But as the yields on benchmark Greek bonds soared and the Athens stock exchange plunged 4 percent, analysts remained divided as to whether the election of a new government with a mandate to reject years of forced austerity will signal a return to the dark days of the European debt crisis.

Greece is again the word in financial markets. For now, though, the crisis vocabulary doesn’t include Ireland, Portugal, Spain or Italy. Greece Crisis 2.0, coming five years after it sent the first shockwaves through Europe, may prove less infectious this time thanks to nations’ improved finances and the backstops provided by euro area politicians and central bankers, Bloomberg News reported.

Greek financial markets plummeted on Tuesday as investors took fright at the premier's decision to hold a no-confidence vote in his administration fuelling fresh political instability and fears of the radical Syriza party taking power, The Independent reported. The Athens share index fell by almost 13 per cent, the biggest single-day drop since 1987 and a heftier decline than any registered in the recent years of financial crisis in the Mediterranean country. Yesterday has already been named “Black Tuesday”.

Greek lawmakers passed the country’s 2015 budget Sunday amid a deadlock with international creditors who haven't signed off on the financial plan and ongoing political uncertainty, The Wall Street Journal reported. The vote comes ahead of Monday’s meeting of eurozone finance ministers in Brussels where they will gather to discuss what will happen when Greece’s 240 billion euro bailout program runs out at the end of the year. After a five day debate in Greece’s 300 seat parliament, 155 lawmakers voted in favor of the budget with 134 opposing it, while 11 lawmakers abstained.

Four months before he aims to become prime minister of Greece, Alexis Tsipras is using the example of Germany’s post-World War II debt relief to bolster his case for a writedown on his country’s liabilities toward euro area member states and the European Central Bank, Bloomberg News reported. “While generosity was extended to Germany, Germany refuses to extend the same generosity,” the 40-year-old opposition leader said in a speech in Athens today, referring to a 1953 deal to write off 50 percent of some of Germany’s external debt.

Thousands of workers, students and pensioners marched through central Athens Thursday as part of a 24-hour nationwide general strike called by the country’s two biggest unions to protest against the government’s austerity program, The Wall Street Journal reported. The protesters, who filed through the city’s main square and past parliament, called on the two-party coalition government to end the austerity measures that pushed the economy into a deep recession, shrank output by roughly 30% and left more than a quarter of the workforce without jobs.

Greek officials held a fresh round of talks with international inspectors in Paris Tuesday in a bid to jump-start deadlocked talks over Greece’s reform and austerity program as the country fast approached a year-end deadline to hammer out a new financing deal with creditors, The Wall Street Journal reported. The talks with the troika—made up of representatives from the European Union, the European Central Bank and the International Monetary Fund—have been stuttering since October, hamstringing Greece’s hopes of negotiating an early exit to its current bailout program.