Today, the Austrian Finance Minister, Maria Fekter stated that if Greece ends up filing bankruptcy it would set off a domino effect across the world in the financial sectors. Many feel that it would be worse than the bankruptcy filing of Lehman Brothers back in 2008. Although the bankruptcy of Greece is thought of as a worst-case scenario, many believe it could still happen.
The finance Minister said today that Greece would end up in bankruptcy within 14 days if the next payment of aid was not given. They believe the aid is needed to stop Greece from defaulting. The hitch in the whole process is the International Monetary Fund’s willingness to help. Many experts believe that if the IMF does not step in a bankruptcy filing by Greece is eminent.
Greece has already been waiting for months for an $8 billion float as part of $110 billion rescue package in Euros. The government of Greece will be required to meet fiscal targets, while being in the middle of the worst recession since the Great Depression. It has been reported that Greece will run out of money by mid-November if someone doesn’t step up.
The finance ministers of all member countries still have to work out agreements on the European Financial Stability Facility and should be done soon before it ends up in bankruptcy. The finance minister also said the banks need to be prepared to withstand rough winds.
Many experts worry that if Greece ends up in bankruptcy, what will happen to the EU? Only time will tell as the drama unfolds.