The European nation of Greece has been on a financial rollercoaster recently, since it is severely in debt and needs help from the rest of the European Union to keep it from defaulting on what it owes its creditors. If Greece were to default on its debt, the entire world economy would suffer severely.
Now, the European Union has agreed on a bailout deal for Greece, where it would give the Greeks a loan to help them pay their debts. Upon announcement of that news, world stock markets rose considerably. However, Greece announced it needed to vote on whether to accept the bailout, which shocked Eurozone members and threw world stock markets into another tailspin.
Greeks maintain they need to be able to vote on the measure because the bailouts have required them to make major cuts to jobs, government services and other programs that affect their livelihoods. However, if they vote not to accept the bailout and default on their debts as a result, world could experience another recession.
"France wishes to recall that the plan adopted last Thursday unanimously by the 17 states of the eurozone is the only way to solve the problem of Greek debt. Giving voice to the people is always legitimate, but the solidarity of all countries in the eurozone cannot be exercised without the consent of each effort." - French President Nicolas Sarkozy
"We have a duty to give priority and highlight the role and responsibility of the citizen, showing in practice not only our respect, but also our fundamental thinking that this citizen is the source of our strength and of our very existence. This, dear colleagues, is the referendum." - Greek Prime Minister George Papandreou
1. What is the European Union? What is the Eurozone?
2. What is debt?
3. What does it mean to default on debt?
4. What is a referendum?
1. Do you think it's right for the Greek people to have a referendum on whether to accept the bailout money? Why or why not?
2. Why is this a tricky situation for the Greek people? What would it mean for them to accept the money? To not accept it?
3. Why do you think the stock markets react the way they do to changes in the situation in Greece? How could what's happening in Greece affect you?