The financial crisis in Greece has caused some investors to jump ship, but hedge fund managers want in. While lawmakers in Greece continue to work to stabilize the economy, opportunists are looking to gain from the country’s financial hardship. When a country is unable to pay its debts, fewer people want to invest. In the case of Greece, trouble has been looming for quite some time. In addition, the banks that have invested in Greek debt will have no way of collecting the money that is due to them.
The European Union has already bailed out Greece once, however, a second loan that is being discussed doesn’t look like its going to come through. The only way that Greece will be able to survive is if enough hedge funds agree to buy its bad debts. The bad news for Greek lawmakers is that they would be responsible for repaying these loans at a phenomenally high interest rate. In short, Greece might be funding several large scale hedge fund companies for the next few decades.
Although politicians in Greece don’t want to make the deal, they really have few other options. A total financial in Greece would have catastrophic effects on all of Europe, but it appears that the banks that Greece owes money to are unwilling to intercede yet again. Overall, Greece allowed itself to go into major debt without fully considering the future ramifications. Hedge fund managers from all over the world are converging on Greece with the goal of making huge profits.