Greece started spiraling out of control financially in late 2009, which leaves them where the Europeans are today, debt. Greece government (Parliamentary Republic) relies on borrowed money to balance their books and begins to really get out of hand when credit rating agencies downgraded Greek government to “junk” pushing the cost of borrowing so high that the country effectively overdraft cancelled over night. The general information on Greece would be that the government type is Parliamentary Republic, meaning the supreme legislative power resting with a body of cabinet ministers chosen from and responsible to the legislature or parliament. GDP per capita is 24,000 euros and population of 10.71 million. Compared to Germany with a GDP per capita of 43,741 and a population of 82.5 million. GDP per capita is simply the total GDP divided by the size of the population. Germany is also one of the largest national economies in Europe. Greek people enjoy a high standard living, with big homes, and expensive surroundings and environment. They are considered a very rich culture (Historically as well). July 2007 we experienced the Global Financial Crisis (GFC) otherwise known as the credit crunch, when a loss of confidence by United States investors in and value of sub prime mortgages caused a liquidity crisis. This event is what we think and led to the extreme debt in the European countries. Eurozone countries have kept Greece afloat for the past century. In return France and Germany wanted bailout packages for the price of 240 billion euros. Private sector lenders, swapped 77 billion in Greek debt for new bonds worth as much as 75% less and this turns into tax revenues falling, prices on homes rising, airports closing, strikes and many other extreme changes for the European society. During the Greece debt crisis there was a huge unemployment rate as well and an inflation level of 50%. In early May 2012 voters upended the countries political system in a parliamentary election that saw the crushing defeat of the dominant parties who were blamed for Greece’s collapse. Almost none of the money is going to the Greek government to pay for vital public services. About 19 cents of every euro bailout money makes its way to fund Greece’s overspending. Its now public institutions, which hold a majority of the Greek debt. If Greece were to default it would be the taxpayers who would carry the largest share of the burden. After the debt was issued, firms, wall streets and big businesses were split in half and made big bets on the debt usually with borrowed money as well, coincidentally. They would bet on the percentage of the amount of money they were losing and try to build up their own debt by receiving more borrowed money in the process of trying to raise revenue.
(This is the Greek GDP in percentage, showing how much it fell throughout the years. The GDP had a major downfall in late 2010 from beginning to spend too much money in a short period of time causing the GDP to fall) After Greece adopted the single currency when the public spending increased dramatically. The reason for this was because Greece had ECB central bank to fall back on. (But failed and ended up in debt) At first they had just joined the euro and that was enough to rock the boat but then came on the single currency and made spending soar. The public sector wages rose by about half of what it was before within just 6 years. Tax evasions stampeded the income and they already needed to pay off big debts that were left from the
Background on Greece’s Debt Crisis “You cannot spend more than (what) you earn…you should not borrow more than (what) you can afford.” This, according to an editorial published by the Greek newspaper Kathimerini, may be the lesson Greeks are now learning the hard way.1 Unrestrained spending of successive Greek governments over a long period may have driven the country’s budget and current account deficits.2 Greece borrowed heavily from international capital markets to finance public sector jobs,…
agreed on a strategy to bail out Greece, a country that had joined that European Monetary Union (EMU) in 1981. Greece had finally adopted the Euro currency in 2001. Greece went into unrecoverable debt by overspending income on social programs and other projects to benefit Greece, thus not allowing them to pay off loans, or borrow money to do so. In 2001, Greece wanted to join the EMU but faced certain obstacles concerning their current debt. Greece required a 60% debt-to-GDP ratio for admission to The…
Our story begins two years later, when Greece becomes accepted as the 12th member of the eurozone countries. In the recent past, a number of EU members, including Greece, Ireland, Portugal, Spain and Belgium, shook the global financial markets with their sovereign debt crisis. In this paper, we will primarily focus on financial crisis in Greece, discussing the current situation and exploring the root…
Control Abstract This paper is concerned with the concepts of accountability; representation and control explain the euro debt crisis in detail. The author takes a deeper journey into the meaning of occurs of Euro sovereign debt crisis by use of definition of ARC to in-depth explain this issue. We propose further examination of the ARC relating to the Euro sovereign debt crisis in order to propose a prosperous and harmonious of Euro zone. Table of Content Abstract 1 1. Introduction 4 2…
Attention Getter A debt of approximately 303.92 billion euros has caused the citizens of Greece to act out. ● Introduction of Problem Recently the Greek rebels have turned to street art to express their outrage. ● Importance of Problem (source) The debt is crucial to the state of the country because it's causing so much unrest that citizens have turned to vandalizing to voice their outrage. ● Thesis The citizens only want the government to fix the nations debt, and they chose to protest through street art…
The Greek Debt Crisis: Can Greece’s Economy Recover? The Greek debt crisis is one of the biggest economic challenges our global economic system has faced. Fear of Greece’s enormous debt as a percentage of it’s Gross Domestic Product (GDP) and its ability to pay the interest as well as the principle of her bonds, has every nation and global markets holding its collective breath. The question of concern is can Greece recover regardless of the amount of money loaned to her? Today, the world has…
the fist part of the rescue package. Three days following, Standard & Poor’s downgraded Greek bonds by three notches to BB+, or “junk” status, which directly caused Greece loose its access to capital markets. On May 2, EU and IMF claimed an aid package of €110 billion. “The number was based on an allowance of €100 billion so Greece could stay out of the markets for three years, plus an added 10 billion for the safety of the baking system,” Papaconstantinou, the Greek finance minister, explained…
5 References 6 HOW THE GLOBAL DEBT CRISIS COULD AFECT YOU Reasons for selecting the article The reasons for choosing the article are that firstly, it stated that aggregates for economic consequences, GDP, recession and unemployment have greatly affected Singapore economy. The article also focused on the nation behaviour of the declining economy for US and Greece due to finance crisis which in turn affect other nations, in this case, Singapore…
In the article “Greece Sets Up Its Own EBay To Unload Property,” it talks about how Greece is striving to raise as much as 50 Million Euros a year from online property auctions in order to help pay down its debt. After the European Commission, European Central Bank and The International Monetary Fund, the three main lenders of money to Greece, all bailed out on the country; the government pledged to sell assets in order to raise themselves out of a great amount of debt. With Greece in its sixth year…
2008, the European sovereign debt crisis has been the most serious problem for the ECM. This crisis, also called “the Euro Crisis”, has been regarded as the most serious financial crisis at least since 1930s. This crisis began with the Greek fiscal crisis in the autumn of 2009, and then it evolved into the “PIIGS Crisis”—five main European countries namely Portugal, Italy, Ireland, Greece and Spain were not able to gain enough economic growth in order to pay their debt obligations, and this is why…