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, 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>.