Greece : On Considering The Possibility Of Leaving The Euro

The Golden Age of Greece is well known for its sculptures, buildings, rulers, and philosophies. Today, modern Greece is known for having economic crisis's as well as political turmoils. Greece's problems began when they joined the European Union. Greek drachma was officially replaced by the euro when they joined. Greece approved the euro in 2001, not knowing what they were getting in to. When the Prime Minister Konstantinos Karamanlis came to power he realized that the budget deficit was not 1.5%, but 8.3%. That outstanding amount greatly hurt the economy. By 2008, Greece's tax collection crumpled and unemployment was at an all time high. Unfortunately, by 2014, 30% of Greek's population did not have a job (Greece Debt Crisis). In contrast, today's Greece is a complete different from the Golden Age. Greek unemployment soared as austerity took its toll.

Ever since the end of 2009, Greece has been involved in a financial and economic crisis that has been record breaking and shattered world records in terms of its severity and worldwide effects. The Greek government, since the beginning of the crisis, has attempted to take several governmental measures to try and “stop the bleeding,” including economy policy changes, dramatic government spending and budget cuts and the implementation of new taxes for citizens. In addition to this, the government has tried to alter the perceptions of Greek government and economy by the rest of the world in an effort to appear both more liberal and more democratic. Greece has also been working to privatize many previous

for no new austerity measures as seen in a July 2015 referendum on the topic. If Greece

Greece's best chance of surviving their economic problems lied in their joining of the European Union or the "E.U." The E.U. is a political and economic union made up of 28 European countries that was created following the end of the Second World War (“The E.U.,” n.d.). In the guidelines laid out by the

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

The economic crisis of 2008 in New York had ripple effects around the world, causing deep structural problems within the European Union to crumble the economies of several countries. These countries, known as the PIGS, are made up of Portugal, Ireland, Greece, and Spain, and collectively hold most of the sovereign debt problems of the European Union. After fast growth early in the decade, these countries were spending too much money and not securing their own banking sectors with enough capital. Soon, the debt the PIGS owed caused massive problems throughout the EU, and Germany and France had to come to the rescue of these poorly managed countries. (Greek Crisis Timeline, 1) Now, in 2012, the issue has yet to be fully resolved. Greece is still sinking, and a massive bailout for Greece's banks is required. The debate is whether Germany should continue bailing out Greece and collecting interest on its loans, or whether Greece should try to separate itself from the broader European Union, in an attempt to manage its own finances and declare bankruptcy in order to save itself from crippling interest payments. Each path offers an escape from the present situation that Greece finds itself in, but only the path of bailout results in a harmonious European Union. If Greece fragments off from the EU, then the entire union is weakened as a result. I believe that Greece should accept the terms of the bailout that Germany has provided, and should undergo several years

In a business world that is ever changing, looking at Greece and Russia from where they have been and where they are now, is startling. Each country has had many ups and downs over the years through wars, economic downturns and many other strife’s, and currently are in an uphill battle. The struggle is real to stay afloat in an unknown business world. As each countries business climate is different, some characteristics of each are the same. Many business opportunities are available to those who wish to do business in either country, but some would wonder would they really want too, based on their current financial woes.

In addition, some economists believe that there is a low risk of economic contagion from Greece and some of the other “Crisis nations” on the periphery of the EU have also been bouncing back (Porter, 2015). Based off of these factors, it seems that the likelihood of Greece experiencing a bounce back after such a debt forgiveness agreement is far better than through previously attempted methods, most notably the previously imposed austerity measures that largely worsened Greece’s recession. However Porter even goes so far as to state that, “The cost to Europe’s creditors would be minuscule,” by taking such a route and brings up an important issue, as there will be costs to the creditors and it will be also be an exceptionally costly political action to take in northern European nations. Yet in comparison to the costs of other potential routes, such as Greece leaving the EU altogether. Greece may also run the risk of defaulting yet again, as it had in 2012 with one hundred billion euros wiped from its debt via the private sector (“The Wait,” 2012). It is very possible that another default on their debt, could be much more serious and not just impact private investors, but also Greece’s creditor nations. By following such a method, they are essentially able to take charge over the circumstances and establish their own terms in the process to

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

The problem Greek is being faced with today could be dated back to 2001 when the Euro emerged and the drachma was dropped. The emergence of the Euro lead to an

In 2009, The Greek debt crisis began. This crisis is still ongoing today, but there have been many changes that occurred in Greece. This is also known as the Greek Depression. It is part of the ongoing Eurozone crisis, which was generated by the global economic recession which started in October of 2008. It is said to be caused by a combination of a weak Greek economy and an overly high structural deficit and debt to the countries ' government debt and the gross domestic product. Later in 2009, the question/ fear of sovereign debt crisis, which is the failure or refusal of the government to pay back debt in full, developed concerning Greece’s ability to even meet its obligations of paying its debt. This all led to a full blown crisis and risk insurance on credit default swaps, which are pretty much giving out loans to help pay off some of their debts.

Greece can strive for recovery by exiting the Eurozone and adopting Drachma as its currency. The relative devaluation of the currency will give a boost to its export industry and also allow it to repay its debt with cheaper currency.

Early economic troubles in Greece can be dated back to 2001, the year of admittance to the Eurozone. In 2004, Greece was the host of the Olympic Games, which was the start of borrowing mass amounts of money that the country had no set plan to repay. By 2009, data inaccuracies proved that Greece’s budget deficit was actually 12.7% in the year that it applied to be a member of the Eurozone, instead of the 3.7% that they claimed. That was more than four times larger than what the European Union allowed. Following that, in 2010 Greece was told by the European Union to further spending cuts in order to reduce some debt. Greece borrowed euros in emergency

Had Greece not joined the Euro, they may have been able to avoid the crisis by printing more of its currency, the drachma. In result the value of the Greek currency would have lowered in value on the Foreign Exchange Market encouraging competitive Greek exportation. The outcome of this would have been lower domestic interest rates, encouraging investment and the ability to be able to pay the country’s debts.