Greece’s currency is now valued at a paltry 0.3 per cent of its historic highs, the worst performance for a single currency in decades, with many Greeks questioning whether the country is ready for the global economic downturn.
Greek stocks fell by almost a third in the past three months, wiping out their gains in the wake of a currency collapse that has sent the country’s gross domestic product (GDP) plummeting.
Greece’s currency lost almost 40 per cent in value over the past week, while foreign investors are losing interest, analysts said.
The drop has seen Greece’s central bank stop lending to the country, which is reliant on imports to stay afloat.
The currency is currently trading at less than 0.2 per cent, the lowest level since it was reintroduced by a troika of international creditors in December 2009.
Greese Prime Minister Alexis Tsipras said on Tuesday that the country would be ready to use the IMF for the first time in 20 years to try to reverse the loss of confidence and debt.
“We will be ready for an IMF loan at any time, anytime, anytime,” he said.
“At this moment, I’m afraid we are still waiting for an offer from the IMF.
It is important to remember that we cannot expect to pay an IMF debt, even a small one, for an entire year, and we cannot have this debt burden.”
The Greek economy shrank by 3.9 per cent last year and is now projected to shrink by 5.1 per cent this year.
The collapse in Greek bonds comes after the country announced it would slash its public sector pay rate to 8.5 per cent next year and to 3 per cent the following year.
That decision was met with strong opposition from the ruling New Democracy party, which has been in power since 2010.
“I am not surprised at all that the public sector is being reduced,” Greek Finance Minister Yanis Varoufakis said at a news conference.
“It’s the first step in the right direction, but we will see whether it’s enough.”
Tsipras has pledged to spend €2.5bn ($3.6bn) in public works and infrastructure spending over the next two years, and has vowed to boost wages and pension schemes.
His ruling Syriza party has been unable to bring about a broad agreement on a new bailout for the country.
The country’s economy contracted by 4.6 per cent year-on-year in the third quarter of 2017, the slowest rate since 2010, while its debt rose to a record of €1.2 trillion, the third highest in the world.
The country’s unemployment rate stands at nearly 15 per cent.