<P> On 1 May 2010, the Greek government announced a series of austerity measures (the Third austerity package within months) to secure a three - year € 110 billion loan (First Economic Adjustment Programme). This was met with great anger by some Greeks, leading to massive protests, riots, and social unrest throughout Greece . The Troika, a tripartite committee formed by the European Commission, the European Central Bank and the International Monetary Fund (EC, ECB and IMF), offered Greece a second bailout loan worth € 130 billion in October 2011 (Second Economic Adjustment Programme), but with the activation being conditional on implementation of further austerity measures and a debt restructure agreement . Surprisingly, the Greek prime minister George Papandreou first answered that call by announcing a December 2011 referendum on the new bailout plan, but had to back down amidst strong pressure from EU partners, who threatened to withhold an overdue € 6 billion loan payment that Greece needed by mid-December . On 10 November 2011, Papandreou resigned following an agreement with the New Democracy party and the Popular Orthodox Rally to appoint non-MP technocrat Lucas Papademos as new prime minister of an interim national union government, with responsibility for implementing the needed austerity measures to pave the way for the second bailout loan . </P> <P> All the implemented austerity measures have helped Greece bring down its primary deficit--i.e., fiscal deficit before interest payments--from € 24.7 bn (10.6% of GDP) in 2009 to just € 5.2 bn (2.4% of GDP) in 2011, but as a side - effect they also contributed to a worsening of the Greek recession, which began in October 2008 and only became worse in 2010 and 2011 . The Greek GDP had its worst decline in 2011 with − 6.9%, a year where the seasonal adjusted industrial output ended 28.4% lower than in 2005, and with 111,000 Greek companies going bankrupt (27% higher than in 2010). As a result, Greeks have lost about 40% of their purchasing power since the start of the crisis, they spend 40% less on goods and services, and the seasonal adjusted unemployment rate grew from 7.5% in September 2008 to a record high of 27.9% in June 2013, while the youth unemployment rate rose from 22.0% to as high as 62% . Youth unemployment ratio hit 16.1 per cent in 2012 . </P> <P> Overall the share of the population living at "risk of poverty or social exclusion" did not increase notably during the first two years of the crisis . The figure was measured to 27.6% in 2009 and 27.7% in 2010 (only being slightly worse than the EU27 - average at 23.4%), but for 2011 the figure was now estimated to have risen sharply above 33% . In February 2012, an IMF official negotiating Greek austerity measures admitted that excessive spending cuts were harming Greece . The IMF predicted the Greek economy to contract by 5.5% by 2014 . Harsh austerity measures led to an actual contraction after six years of recession of 17% . </P> <P> Some economic experts argue that the best option for Greece, and the rest of the EU, would be to engineer an "orderly default", allowing Athens to withdraw simultaneously from the eurozone and reintroduce its national currency the drachma at a debased rate . If Greece were to leave the euro, the economic and political consequences would be devastating . According to Japanese financial company Nomura an exit would lead to a 60% devaluation of the new drachma . Analysts at French bank BNP Paribas added that the fallout from a Greek exit would wipe 20% off Greece's GDP, increase Greece's debt - to - GDP ratio to over 200%, and send inflation soaring to 40--50% . Also UBS warned of hyperinflation, a bank run and even "military coups and possible civil war that could afflict a departing country". Eurozone National Central Banks (NCBs) may lose up to € 100bn in debt claims against the Greek national bank through the ECB's TARGET2 system . The Deutsche Bundesbank alone may have to write off € 27bn . </P>

Some european nations have experienced a debt crisis