EUROZONE CRISIS// The people of Greece have rejected a plan proposed by other European countries that would give their country new money through loans, but would require their government to cut back on expenses such as pensions given to old people. As a result, the country now owes billions of dollars to international banks with no way to pay them back.

It all began in 2008, when Greece began borrowing heavily from banks to fund the activities of its government and banks. By 2010, it had run out of money. At that point, financial institutions in the EU stepped in and gave Greece money in return for a promise that the government of Greece would raise taxes, cut expenses and run the country more efficiently. Greece is a part of the European Union (EU), which is a cluster of European nations that share the same currency (euro), and have porous borders. By 2010, it had run out of money. At that point the EU stepped in and gave Greece money in return for a promise that the government of Greece would raise taxes, cut expenses and run the country more efficiently.

Five years later, Greece is not doing too well. The money given by the EU went towards paying off old loans. Thanks to higher taxes and low government spending, companies and businesses aren’t doing well either and many Greeks don’t have jobs or money to pay for college. Greeks blame the tough new rules (high taxes, low expenses) set out by the EU in 2010 as the reason they are doing badly and as a result most of them voted “No” in a referendum on whether Greece should accept a new set of loans from the EU.

Without the money, Greece will not be able to pay back the EU and it may force the country to leave the EU and go back to its own currency, the drachma. Will that save the Greek economy and improve the lives of its people? The jury is out on this one.