Greece is a thorn in the European Union's side, and problems are flaring up again. Athens is refusing to agree to the heavy austerity measures demanded by its creditors over its 86 billion euro rescue package. The backdrop is an unexpected 0.4 percent shrinkage in the Greek economy that may expand into a full-blown recession in the coming months. Needless to say, the budget 'surplus' the European Commission expected from Greece will probably not materialize.
What Next?
Greece faces a 7.5 billion euro debt repayment to the ECB in July of this year, and European officials will be keen to get this issue resolved as quickly and amicably as possible to avert pressure on the euro, especially in light of Brexit and other Euroskeptic sentiments in France and other countries. The euro is in hot water. Many want Greece to take its problems and leave, but this would be a severe blow to every country in the Eurozone. The once mighty currency may eventually hit an (almost) unprecedented 1:1 parity with the dollar.
The weak euro a problem for Trump, who feels like export-driven Germany is profiting from an unrealistically devalued euro tailored to unstable countries like Slovakia and Greece; however, there is no clear resolution to this issue as a removal of the weak links would likely send the single currency even further down due to instability.
