Greece Financial Crisis In Greece

The Troika, made up of the International Monetary Fund, European Commissions and the European Central Bank have the most to lose in this debt crisis as they own 78% of Greek debt. With so much to lose we have seen European “bailout” agreements that mostly front the Greek government more money coupled with crippling austerity in an effort to “rebuild” the economy. Austerity discourages growth as it cuts the spending of the government who is by far the biggest spender in the economy. The effects of austerity can be devastating, but the true effects are often hidden beneath the messages we get from mainstream news sources. The stereotype of the Greek people as lazy and tax evading has desensitized the public and has made austerity seem like more of a sensible option. The media messages have made strict austerity measures seem justified and in effect have hegemozined the Greek people.

Where they had not yet adopted the euro nor ascended into the union, Greece's public service sector (though accounting for half the countries GDP) was seen to seriously hinder any efforts to increase economic growth. But since accession, rapid mobilization of the economy has started to route out the stitches in the corrupt service sector (most reform has been in recent years though). But rapid economic reform didn't come directly after accession, for it wasn't until recently that Greece started better allocating EU subsidies. Until the country had finally set out to reform its poorly structured civil service sector, much of the subsidies were seen to be wasted on remedial government plans and initiatives such as increased electorate pay. Abuse of subsidies was recorded up until the early 90s, but since then Greece has seen considerable returns in foreign investments, and a marginal decrease in both the national debt and inflation rates . To better illustrate Greece's economic standing today, one might take note of the fact that the country is now in a position to distribute large amounts of aid (E.g., Bosnia- Herzegovina) while slowly relying less and less on EU subsidies. Many also believe that Greece's poor economic strategies in early years should serve as a lesson for future Balkan members awaiting accession into the EU as well.

Define the Greek economic system (Capitalism/Communism/Socialism/mixed system) and state how the way they organise their factors of production contributed to the current situation.

History tends to repeat itself and Greece is no exception. Greece’s current economic crisis can be partly blamed on Greek mythology. It can be seen with Greece’s prime minister Alexis Tsipras decisions in policy which have resulted in similar repercussions as the myths. For example,

As far as Greece’s role in creating this crisis in the first place, it can be said that Greece is at fault for a variety of reasons. The media has been focusing on the corrupt political system and infrastructure, the lack of competition in the private sector, the wastefulness and inefficiency of the public sector and a flawed tax system as causation for this mess. When the public sector was expanded in the 1980’s, Andreas Papandreou was given various agricultural subsidies and grants to do with what he pleased. This enabled the funding of certain post-World War II groups to heal political wounds and fund unions and other special interest groups to aid his political capital and strength. The policies enacted in this decade allowed for the increase in power and funding of the middle class by creating a vast amount of inefficient public sector government jobs for citizens. This resulted in an increase in the levels of inefficiency, bureaucracy, corruption and wasteful spending coupled with the increase in wages, pensions and benefits. This proceeded to drain through government money and resources, and did not breed a culture of highly motivated, efficient and effective government employees. A high amount of debts accumulated as the nation continued to proceed in this way, using state money to subsidize failing businesses

First of all, the government is very corrupt. Also, there is lots of economic hardship, decreasing income, poverty, very limiting medical access, and an unemployment rate of 20-25% and 60%+ for teenagers. The government isn’t helping the people very much, and Greece is losing lots of money. Greece also has numerous debts that they aren’t able to pay off right

Greece is a country with a big potential. Greece does have multiple natural resource that could help them develop their country. Greece does have lignite, petroleum, iron ore, bauxite, lead, zinc, nickel, magnesite, marble, salt, hydropower potential. In all Greece’s land used, 63% is agricultural land in which 19.7% is arable land, 8.9% is permanent crops and 34.8% is permanent pasture. However, 30.5% of Greece’s land is forest.

The roots of Greece’s economic problems extend deep down into the recesses of history. After the government dropped the drachma for the euro in 2001, the economy started to grow by an average of 4% annually, almost twice the European Union average. Interest rates were low, unemployment was dropping, and trade was at an all-time high. However, these promising indicators masked horrible fiscal governance, growing government debt and declining current account balances. Greece was banking on the rapid economic growth to build upwards on highly unstable foundations. In 2008, the inevitable happened – the Greek debt crisis.

In 1999, ten European nations joined together to create an economic and monetary union known as the Eurozone. Countries, such as Germany, have thrived with the euro but nations, like Greece, have deteriorated since its adoption of the euro in 2001. The Eurozone was created in 1999 and currently consists of eighteen European nations united under the European Central Bank and all use the euro. The Eurozone has a one point six percent inflation rate and an eleven point six percent unemployment rate in 2014. Greece joined the Eurozone in 2001 and was the poorest European Union member at the time with a two point six percent inflation rate3 (James, 2000). Greece had a long economic history before joining the Eurozone. The economy flourished from 1960 to 1970 with low inflation and modernization and industrialization occurring. The market crash in the late 1970’s led Greece into a state of recession that the nation is still struggling with. Military failures, the PASOK party and the introduction of the euro have further tarnished Greece’s economic stability. The nation struggles with lack of competitiveness, high deficit, and inflation. Greece has many options like bailouts, rescue packages, and PPP to help dig it out of this recession. The best option is to abandon the Eurozone and go back to the drachma. Greece’s inflation and deficit are increasing more and more and loans and bailouts have not worked in the past. Leaving the Eurozone will allow Greece to restructure and rebuild

Greece is the 13th largest economy in the 28 member European Union as of 2013. In terms of each person’s income, it is ranked 37th or 40th on the planet at about $22,083 & $25,331 for supposed GDP and buying power equivalence correspondingly.

As a country Greece always struggled with its finances. In the 1990s, it consistently ran significant budget deficits while using the Drachma (the former currency of Greece). Because of this, Greece joined the European Union in 2001 which was two years later than other nations. After joining the EU, Greece had a time of prosperity. This did not last too long as a financial crash occurred in 2008. This affected other countries in the EU, but Greece was hit the hardest. In the time before joining the EU, if a situation such as this occurred, Greece would print more currency, boosting the economy . However, since the Euro was controlled by the European Central Bank (ECB), this was not an option. Unemployment was soaring all over Greece. This was worse than the unemployment in the United States during the Great Depression . Most affected were the younger adult population. Besides from unemployment, Greece had an issue with uncollected tax receipts. Greece had more tax debts than any other country in the EU.

Greece’s economy ranks 130th freest in the 2015 index and a score of 54.0 in economic

Although a commonly accepted view is that the hidden budget deficit in Greece is the beginning of the European sovereign debt crisis, the real causes of this economic crisis can be various. To reveal the whole event, a comprehensive review of the background is

Greek government could default, exit the euro and reintroduce the drachma, which would instantly depreciate, possibly by 50 percent or more. This would leave Greeks much poorer than their European neighbours, and would inflict horrible economic pain in the short term. But it would also make the Geek economy much more competitive. Flight capital would begin to return to take advantage of the investment opportunities, and millions of tourists would flock in for a cheap holiday. After the intial pain, growth would soon pick up.

Greece’s government type is parliamentary republic. The Prime minister of Greece is Antonis Samaras. The Euro is the currency used in Greece. 1 Euro is equal to1.37 USD.