PIIGS

While reading today’s news, I came across this beautiful article about PIIGS economies - Portugal, Italy, Ireland, Greece and Spain

Markets all over world were down due to the news coming from Greece. Greece is bankrupt. Can you ever think of a country getting bankrupt? Yes it can happen, it’s very simple, Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. The same happened in the case of Greece. Greece owes $226 billion to other countries, most of it to other countries in Europe. In this case speculation is there that Greece will not able to repay its debt.

Think about it what happens if a country declares itself Bankrupt. It will not able to repay its loan, also its GDP is so low that it can’t meet its current obligation. So think about it if a country can’t pay its obligation it will also not able to pay salaries of government employees. Intern it will again reduce the purchasing power of those employee, this cycle will continue until & unless fresh money is injected into the system.