How Greece Escaped a Major Crisis – For Now

The Euro zone’s 19 finance ministers granted Greece a desperately needed economic lifeline, the country’s finance minister Yanis Varoufakis announced that the deal provided a “way out” of Greece’s problems. Depositors have withdrawn €23 billion from Greece since December 2014. Since European governments bailed out Greece from its financial woes in 2010, the nation has struggled to overcome what economists call an “austerity trap.” In order to maintain a primary surplus, Greece must curtail government spending. This depresses the economy, and deprives the government of income. That, in turn, makes it hard to maintain a surplus without cutting government spending even further.