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 "The Greek Crisis Explained." Fance 24. International News 24/7, 05 Oct. 2010. Web. 24 Feb. 2011.<http://www.france24.com/en/20100504-greek-crisis-eu-imf-bailout-d ebt-econ omy-germany-france-unions-jobs-euro-markets>. Muir, David, and Bradley Blackburn. "Greeks Take to the Streets in Violent Protests Over Economic Problems." Breaking News, Politics, World News, Good Morning America, Exclusive Interviews. ABC News, 05 May 2010. Web. 24 Feb. 2011. <http://abcnews.go.com/WN/greeks-streets-violent-protests-economic-probl ems/sto ry?id=10567233>. "Greece Economy." Expedited Visas, Visa Applications, Rush Passport, Passports, Travel. Travel Document Systems, Inc., 2011. Web. 27 Feb. 2011. <http://www.traveldocs.com/gr/economy.htm>. "Q&A: Greece's Financial Crisis Explained." Breaking News, U.S., World, Weather, Entertainment & Video News. CNN, 26 Mar. 2010. Web. 27 Feb. 2011. <http://www.cnn.com/2010/BUSINESS/02/10/greek.debt.qanda/index.html# >. "Commission Recommendations for Greece." European Commission Economic and Financial Affairs. EUROPA, 2 Mar. 2010. Web. 27 Feb. 2011. <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>.