Download Greece is a European country with rich history

Greece Inquiry: why did it go bankrupt?
Namtae Lee
Greece is a European country with rich history, in which numerous
significant battles shaped the economy and the culture of the country. Once,
Greece was feared as the most powerful army of the continent, however, the
numerous losses in recent battles have caused a downfall in Greece’s economy,
which resulted in Greece categorized as a LEDC by the United Nation. However,
in the 20th century, Greece earned a membership in the European Union and
OECD, which allowed Greece to have greater opportunities for international
trades. But, more significantly, Greece’s membership have acted as an
advertisement, which have alerted many rich Europeans to become aware of
Greece, and Greece welcomed those rich European tourists with the theme of: a
country with religious, noble, and rich history. Fortunately, tourists were
attracted by the history of Greece, and the tourism in Greece bloomed in the 20th
century, and have caused huge inflation in business, and dramatically increased
the GDP of a country. The tourism of Greece has, within a century, helped to
shape the Greece of the 21st century: a MEDC country with 25th highest GDP, 25th
GDP capita, and 22nd highest standard of living in the world. Then, in January
2002, Greece declared its change in currency to Euro, which provided the
country with high rates of Eurobond market, but in exchange of a possibility for a
high inflation. The change of currency to Euro increased the consumer spending,
and has caused a second economic boost in Greece. The country have experience
two major economic boost in 30 years, amazing the economists of the world, but
as the global trend suggests, Greece developed to a MEDC country in such a short
period of time and with little experience leaving the country with many fatal
weakness in the economy, leading to the “Greece Debt Crisis”.
As mentioned before, the Greece has suffered a debt Crisis in the 21st
century, and recently, in 2011, Greece declared its bankruptcy. There are various
reasons for why Greece went bankrupted. The biggest reason is the sudden
growth of economy of Greece. Greece has developed into a MEDC country within
50 years, all through major tourism. In brief, the major work industry of Greece
was shaped around tourism. The first problem with this growth was that the
country’s economy increased too quickly that the country lacked the experience
and time as a MEDC country. Growing from LEDC to MEDC in 50 years is a short
period of time, and the disadvantage for this growth is that the country generally
has only one major work force. For Greece, it was tourism. Greece’s income all
came from tourism. Then since 2005, the economy of United State started
shaking, which caused the global economy to become unstable. The unstable
economy made the income decrease, which made life-style more difficult and
tight for majority of the people. Decrease in income caused people to make
choices, and for majority of the people, the opportunity cost was entertainment
and fun, in exchange for food, health, and education. In brief, people cut their
budget on travel. The decrease in budget on travel decreased the number of
tourists in Greece dramatically. The decrease in tourist in Greece caused a chain
reason in the micro businesses in Greece. First, the tour agency and resorts went
bankrupt since its costumers decreased dramatically. The bankruptcy of resorts
and agency caused companies that supply with goods to go out of business. Then,
the decrease in number of tourists made individual businesses such as
restaurants and clothe shops to close. Since tourism was the main industry of
Greece, once tourists stopped coming, Greece’s industry started to stumble. More
and more people became unemployed, and since they are unemployed, they did
not spend any money, and therefore, there was dramatic decrease in tax money.
The decrease in tax money caused Greece to lend money from other countries,
and soon caused it to declare bankruptcy. In summarized sentence, the unstable
economy of the world lead to decrease in income, and the opportunity cost of
tourism for food caused Greece’s main industry force to fall. The fall of Greece
caused another macro chain reaction. The fall of Greece caused the value of Euro
to drop, which caused the countries in Europe to become unstable and fall into a
panic.
Through Greece, many NIC countries learn valuable lessons, which have
the potential to help save the country from crisis. Similarly with many NIC
countries, Greece’s industry focused too largely on one specific work force:
tourism. Once the major industry crumble, it affects other work forces, and cause
micro businesses to go bankrupt. Therefore, it is significant to develop a work
force that does not rely on one source of income. It is necessary and significant
for NIC countries to develop a equal work force, in order to avoid future
bankruptcy like Greece’s bankruptcy. But, more importantly, it is significant to
have a equalized work force since bankruptcy of one country can cause a chain
reaction, that will cause other countries to declare bankruptcy too, just like the
situation of Greece, where the Greece’s bankruptcy caused the economy of
Europe to become unstable.