President Barack Obama visited Cannes, France, this week for the Group of 20 (G-20) economic summit. The conference brings together leaders from wealthy and developing nations. They meet twice a year to address problems that affect the world economy. This week, Greek tragedy stole the spotlight, and leaders focused their efforts on ways to rescue Greece from its debt crisis.
President Obama urged European leaders to help solve the crisis. "There's no excuse for inaction,” Obama said. “That's true globally. It's certainly true back home. And I'm going to keep pushing it."
For years, the Greek government has borrowed and spent more money than it brings in. Now Greece must figure out a solution for its debt or it may go bankrupt.
A Plan to Solve the Crisis
Greece is part of the European Union (EU), an association of 27 countries that are trading partners. Greece is also in the eurozone—a group of 16 countries that use the euro as their currency. Fearing that Greece’s money problems would spill into other countries, the EU agreed to help the struggling nation. Greece has been bailed out twice by the EU in the past two years.
The EU has been working on a plan to help Greece repay the money it owes. On Monday, Greek Prime Minister George Papandreou announced he would put the debt plan to a referendum, or public vote. After backlash from European leaders, Papandreou cancelled the referendum. Many people in Greece are protesting for Papandreou to resign.
The prime minister thinks the EU plan will be hard on the Greek people. It means the Greek government will no longer be able to decide how much money it can spend on things the country needs. But the leaders of France and Germany want Greece to accept the EU’s rescue plan because Greece must repay debts to other countries. If Greece does not repay them, those countries will have trouble paying their debt back too.
Because the eurozone countries share a currency, they are linked through economies. Eurozone countries are looking to the International Monetary Fund (IMF) to rescue Greek’s debt crisis from spreading to large economies like Italy and Spain. Those countries are important to the eurozone because their economies would cost too much to bail out.
An estimated 7,000 protestors held anti-government rallies outside the Greek Parliament today. Public polls show that the Greek public is fed up with tax increases, job losses and Papandreou’s leadership.
Tonight, Papandreou was put up to a confidence vote, which decided if he should stay in power. Papandreou won the vote. If he hadn't, he would have had to resign, allowing for an early election for a new leader.
Before the vote, Papandreou told the Greek Parliament, "I am not interested in being re-elected, but just in saving the country."