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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.

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Financial Crisis: Greece

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  1. Financial Crisis: Greece By: Hong Lai Sylvia Zheng

  2. 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

  3. 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

  4. Greece’s Imports and Exports • Greece imports twice as much as they export

  5. 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

  6. Causes of Financial Crisis

  7. 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)

  8. 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

  9. Probability of Countries Being Unable to Pay Back Debt

  10. 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)

  11. An Explanation of Greece’s Financial Crisis Video

  12. Solutions • What Greece implemented • Raise taxes on fuel, tobacco, and alcohol • Raise the retirement age by 2 years • Decrease government spending • Recommendation • Sterilization • Decrease Unemployment • Fix Inflation Rates ?

  13. 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# >.

  14. "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-financial- crisis>. 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/wp- dyn/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>.

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