Explain Why Greece's economic collapse and What is the financial situation in Greece in

the year 2024 (in the present time )

Greece's economic collapse, often termed the "Greek debt crisis," unfolded as a complex
interplay of historical fiscal mismanagement, global economic downturns, and systemic flaws
within the Eurozone. Spanning several decades, the crisis revealed deep-rooted issues that
necessitated significant reforms and international intervention.

Greece's economic challenges were entrenched in high government spending coupled with low
productivity levels. The government consistently spent beyond its means, resulting in
persistently high deficits. Moreover, Greece's productivity lagged behind its European
counterparts, rendering its exports less competitive on the global stage. These fundamental
weaknesses were exacerbated by the country's entry into the Eurozone, facilitated by
misreporting of its debt levels. Greece downplayed the true extent of its indebtedness to meet the
Eurozone's criteria, thereby gaining access to cheap borrowing that further fueled unsustainable
spending habits.

The 2008 global financial crisis served as a catalyst, laying bare Greece's vulnerabilities to the
international financial community. The crisis dried up liquidity and made borrowing significantly
more expensive for Greece. Concurrently, it exposed the magnitude of Greece's debt burden,
causing widespread concern among investors and creditors. In 2009, Greece's revelation of its
actual debt levels triggered a panic, further escalating borrowing costs and exacerbating the fiscal
crisis.

The response to the Greek debt crisis was marked by stringent austerity measures imposed by the
European Union (EU) and the International Monetary Fund (IMF) in exchange for bailout loans.
These measures necessitated deep cuts to public spending, pensions, and social services, leading
to widespread hardship and social unrest. Despite significant debt restructuring efforts and
defaults on certain obligations, Greece's debt burden remained considerable. The economy
contracted sharply, with GDP declining significantly, unemployment soaring to record levels,
and living standards plummeting.

In recent years, Greece has shown signs of economic recovery. The country successfully exited
bailout programs, indicating a degree of stabilization. Economic growth has returned, albeit
modestly, and unemployment rates have declined, partly driven by the resurgence of the tourism
sector. As for the financial situation in Greece in 2024, the latest macroeconomic forecast
indicates that Greece’s real GDP is expected to grow by 2.3% in 2024 and 20254. The budget
forecasts 2.9% growth in the economy for 2024, up from a projected 2.4% in 20235. The
European Union-paired inflation rate is expected to fall to 2.8 percent in 2024, along with the
unemployment rate going down to 9.3 percent of the workforce from 12.4 percent in 20216. The
country’s current account deficit is predicted to fall to about 6.0 percent of GDP in 2024
However, significant challenges persist.

The debt-to-GDP ratio remains alarmingly high, posing a continued threat to economic stability.
Sustained growth and fiscal discipline are imperative to alleviate this burden and prevent a
relapse into crisis. Moreover, the social consequences of the economic downturn linger, with
poverty rates remaining elevated and social tensions simmering beneath the surface. Rebuilding
social cohesion and addressing income inequality are critical tasks that require long-term
commitment and investment.