Financial Crisis: Greece
Transcription
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 1 01.04.2015 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 - 2 01.04.2015 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 3 01.04.2015 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