The European country of Greece has been beset by financial worries recently; In recent years it managed government finances poorly and currently owes hundreds of billions of dollars to creditors around the world. When the International Monetary Fund (IMF) loaned money to Greece back in May, it insisted Greece take drastic measures to reduce national spending. Many of these measures involve cutting wages and pensions for government workers, which have fueled protests by Greeks who feel those cuts are too extreme.
NewsHour Economics Correspondent Paul Solman sat down with the American-educated Greek Prime Minister George Papandreou to discuss what's next for his country and how Greece will rebound from a crisis that is affecting financial markets in countries around the world. Papandreou says Greece is prepared to take "painful" cuts to address its problems, but the widespread protests show that its people are sharply divided on the issue. Papandreou insists that, with time, his country will pay off its debts and meet the debt repayment requirements set out by the IMF.
"I think that we're all in a very interdependent world, so that anything that happens anywhere in the world affects everyone else." - Greek Prime Minister George Papandreou
"The trend in Greece is a positive one. We're 40 percent down on our deficit. We're ahead of target for the first report card we're getting from the IMF and the European Union." - Greek Prime Minister George Papandreou
"Even though there are demonstrations, we also have a large support. People understand that this is a patriotic duty, that we must move forward, change our economy, do not default, and deal with our debt." - Greek Prime Minister George Papandreou
1. Where is Greece?
2. What is the European Union?
3. What is debt? Why can too much of it be a bad thing?
1. Papandreou insists the controversial bills containing drastic spending cuts will pass in his country. Based on what you learned from the video, do you think the bills will pass? Why or why not?
2. Papandreou discusses how all the world's countries and financial markets are interconnected today. Do you agree with him? Why or why not? Can you give examples?
3. Does the financial crisis in Greece make you nervous about the economy where you live? Why or why not? Would you travel to Greece if you could?
4. What do you know about the national debt in the U.S.? Do you think a similar crisis could happen here? Why or why not?
5. What are some ways Greece can work on reducing its debt?