Financial Crisis: Greece

Report
Financial Crisis:
Greece
By: Hong Lai
Sylvia Zheng
Discussion Topics
 Background Information
 Greece’s Imports and Exports
 Causes of Financial Crisis
 Financial Crisis in Greece
 How Greece Financial Crisis Affect Other Countries
 Solutions
Background Information
 Greece, a Parliamentary Republic
 Prime Minister, George Papandreou
 Capitalist economy with the public sector
accounting for about 40% of GDP
 Member of EU
 Greece joined in 1981
 In 2001, 12th member of the European
Economic and Monetary Union
Greece’s Imports and Exports
 Greece imports twice as much as they export
Greece Total Trading
( from 2009-2010 )
$80
$64
in billion of US $
$60
$40
$45
$21
$21
$20
$$(24)
$(20)
$(40)
$(43)
$(60)
2009
2010
Greece Trading from Year 2009-2010
Greece total Exports
Greece total Imports
Trade Balance
Greece’s Imports and Exports
 Exports (2009 estimated)-$21.37 billion
 Manufactured goods, food and beverages, petroleum products, cement,
chemicals
 Major markets: Germany, Italy, Bulgaria, U.S., U.K., Romania
 Imports (2009 estimated)-$64.27 billion
 Food and animals, crude oil, chemicals, machinery, transport
equipments
 Major suppliers: Germany, Italy, France, Netherlands, Russia
 Tourism is the main income for Greece
 Provided 15% of GDP
Causes of Financial Crisis
Greece GDP (Real Growth Rate)
Annual GDP Growth (in %)
3%
2%
2%
1%
0%
2008
2009
2010
Greece GDP
-1%
-2%
-2%
-3%
-4%
-5%
-4.20%
Causes of Financial Crisis
 Public debt:
126.8% of GDP (2009)
increased to 144% of GDP
(2010)
 Inflation:
1.2% (2009) increased to
4.5% (2010)
 Unemployment rate:
9.4% (2009) increased
to 12% (2010)
 Current Account Balance:
-$34.43 billion (2009) to
-$17.1 billion (2010)
Financial Crisis in Greece
 Government overspending with its national debt
is $413.6 billion
Paying out salaries on the government dime, with huge
holiday bonuses
Employees were paid a 14-month year instead of 12 months
Also, the extra money gave many Greeks in their early
retirement
 One of the worst countries with debt in Europe
National debt, at €300 billion (aka $413.6 billion), is larger
than the country's economy
Prediction estimated that the national debt will reach 120%
of GDP in 2010
The country's deficit is 12.7% of its national economy
Probability of Countries Being
Unable to Pay Back Debt
How Greece Financial Crisis Affect
Other Countries
 Contagion
If Greece is not helped, it could drag down the entire
European Union
Threatening economies: Portugal, Spain and Italy
 The impact on the common European currency
15 other euro zone economies who have agreed to help out
Greece
IMF announced a bail-out package €95 billion ( $146.2 billion)
An Explanation of Greece’s
Financial Crisis Video
Solutions
 What Greece implemented
 Raise taxes on fuel, tobacco, and alcohol
 Raise the retirement age by 2 years
 Decrease government spending
 Recommendation
 Sterilization
1. Decrease Unemployment
2. Fix Inflation Rates ?
References
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Muir, David, and Bradley Blackburn. "Greeks Take to the Streets in Violent Protests
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>.
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<http://ec.europa.eu/economy_finance/articles/sgp/2010_02_03_sgp_en.
htm>.
Castle, Stephen. "Pressure Rises on Greece to Explain and Fix Crisis." Global Business.
The New York Times, 16 Feb. 2010. Web. 26 Feb. 2011.
<http://www.nytimes.com/2010/02/17/business/global/17euro.html?_ r=2>.
Wearden, Graeme. "Europe's Financial Crisis: As It Happened." Guardian |
Guardian.co.uk. Business Blog, 28 Apr. 2010. Web. 27 Feb. 2011.
<http://www.guardian.co.uk/business/blog/2010/apr/28/greece-financialcrisis>.
Pearlstein, Steven. "Greece and the Myth of the Easy Economic Fix." Politics, National,
World & D.C. Area News and Headlines - Washingtonpost.com. The
Washington Post, 05 May 2010. Web. 26 Feb. 2011.
<http://www.washingtonpost.com/wpdyn/content/article/2010/05/04/AR2010050405128.html>.
"An Explanation of Greece's Financial Crisis." YouTube- Broadcast Yourself. YouTube,
09 Apr. 2010. Web. 27 Feb. 2011.
<http://www.youtube.com/watch?v=KGPNBA6T-sk>.

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