Transcript Financial Crisis: Greece
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, 12 th 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 $60 $40 $20 $ $(20) $(40) $(60)
$64 $21 $(43) $45 $21 $(24)
Greece total Exports Greece total Imports Trade Balance 2009 2010
Greece Trading from Year 2009-2010
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
3% 2% 1% 0% -1% -2% -3% -4% -5%
Causes of Financial Crisis
Greece GDP (Real Growth Rate) 2%
2008 2009
-2%
2010
-4,20%
Greece GDP
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.
Breaking News, Politics, World News, Good Morning America, Exclusive Interviews
. ABC News, 05 May 2010. Web. 24 Feb. 2011.
"Greece Economy."
Expedited Visas, Visa Applications, Rush Passport, Passports, Travel
. Travel Document Systems, Inc., 2011. Web. 27 Feb. 2011.
"Q&A: Greece's Financial Crisis Explained."
Breaking News, U.S., World, Weather, Entertainment & Video News
. CNN, 26 Mar. 2010. Web. 27 Feb. 2011.
"Commission Recommendations for Greece."
European Commission Economic and Financial Affairs
. EUROPA, 2 Mar. 2010. Web. 27 Feb. 2011. 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. Wearden, Graeme. "Europe's Financial Crisis: As It Happened." Guardian | Guardian.co.uk . Business Blog, 28 Apr. 2010. Web. 27 Feb. 2011. 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. "An Explanation of Greece's Financial Crisis." YouTube- Broadcast Yourself. YouTube, 09 Apr. 2010. Web. 27 Feb. 2011.