Globalization and Financial Crisis

Running head: GLOBALIZATION AND FINANCIAL CRISIS
Globalization and Financial Crisis
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1GLOBALIZATION AND FINANCIAL CRISIS
First Economic Adjustment Programme (May 2010 – June 2011)
The First Economic Adjustment Programme for Greece, which was formerly known as the
Economic Adjustment Programme for Greece is a note of understanding based on the financial
assistance to the Hellenic Republic for coping with the crisis of the Greek government-debt. It
was usually referred as the first memorandum or the first bailout package.
The programme was signed on 3rd May of 2010 by the Greek Government under George
Papandreou, the then-prime minister and the European Commission on behalf of the IMF or
International Monetary Fund, the ECB or European Central Bank and the Eurogroup. From the
total of 107.3 billion Euros of financial assistance, 72.8 billion Euros were disbursed within
March 2012, when it was replaced by the next Economic Adjustment Programme for Greece
including the inexpert amount of the first one and an additional 130 billion Euros for the next
two years, i.e.- 2012-2014.
Details
On 1st May 2010, a series of austerity measures were announced by the Greek government. At
the very next day, both the IMF and the Eurozone countries agreed to a 3 year 110 billion Euros
loan, paying 5.5 percent of interest, provisional on the execution of the austerity measures. The
credit rating agencies instantly demoted the Greek governmental bonds to a much lower junk
status. The Greek pubic was very angry due to this programme, and this then led to riots, protests
and mass social unrest. Thereafter, on 5th May, a national strike was held by the public in
opposition. Regardless, the austerity package was accepted on 29th June of 2011, when 155 of
300 of the parliamentary members voted in favor.
Second Economic Adjustment Programme (July 2011 –)