Download Financial Crisis: Greece

01.04.2015
Discussion Topics
 Background Information
 Greece’s Imports and Exports
Financial Crisis:
Greece
 Causes of Financial Crisis
 Financial Crisis in Greece
 How Greece Financial Crisis Affect Other Countries
 Solutions
Background Information
 Greece, a Parliamentary Republic
Greece’s Imports and Exports
 Greece imports twice as much as they export
 Prime Minister, George Papandreou
Greece Total Trading
( from 2009-2010 )
 Capitalist economy with the public sector
accounting for about 40% of GDP
$64
$60
in billion of US $
 Member of EU
 Greece joined in 1981
 In 2001, 12th member of the European
Economic and Monetary Union
$80
$40
$45
$21
$21
$20
$$(24)
$(20)
$(40)
$(43)
Greece total Exports
Greece total Imports
Trade Balance
$(60)
2009
2010
Greece Trading from Year 2009-2010
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Greece’s Imports and Exports
 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
Greece GDP (Real Growth Rate)
3%
Annual GDP Growth (in %)
 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
Causes of Financial Crisis
2%
2%
1%
0%
2008
2009
2010
Greece GDP
-1%
-2%
-2%
-3%
-4%
-4,20%
-5%
Causes of Financial Crisis
 Public debt:
126.8% of GDP (2009)
increased to 144% of GDP
(2010)
Debt as a percentage of GDP, 20092010
 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)
National debt of Greece on the
31/12/2010: 340,29 Mrd (149,7%)
31/12/2011: 367,98 Mrd (170,9%)
scource: European Commission - Eurostat
Uwe Wixforth LL.M. - Embassy of the
Federal Republic of Germany -
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Annual budget deficit 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
Uwe Wixforth LL.M. - Embassy of the
Federal Republic of Germany -
Probability of Countries Being
Unable to Pay Back Debt
Data Collection
The main
European
countries
affected in the
European Debt
Crisis are as
follows:
COUNTRIES
STATISTICS
France
Debt/G.D.P: 81.7%
Unemployment. Oct 2011: 9.8%
S&P Rating: AAA
Germany
Debt/G.D.P: 83.2%
Unemployment. Oct 2011: 5.5%
S&P Rating: AAA
Greece
Debt/G.D.P: 142.8%
Unemployment. July 2011: 18.3%
S&P Rating: CC
Italy
Debt/G.D.P: 119%
Unemployment. Oct 2011: 8.5%
S&P Rating: A
Portugal
Debt/G.D.P: 93%
Unemployment. Oct 2011: 12.9%
S&P Rating: BBB-
Spain
Debt/G.D.P: 60.1%
Unemployment. Oct 2011: 22.8%
S&P Rating: AA
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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)
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 ?
4