It’s no secret that Greece is in quite a predicament. The country is currently in the midst of a crisis that reaches not just all parts of Greek society but a global stage as well. Is Greece at the point of no return, will they end up defaulting on their massive debts from combined lenders, breaking away from the European Union (EU) and the singular monetary system of the Euro? While many people think that is the way to go for Greece, the government could also find solace in the examples of other EU countries. By looking at how these countries were in the same situation as Greece yet have managed to make the necessary spending cuts and social reforms, and in doing so have regained control. This paper, provided will be an overview of the …show more content…
The country subsequently took one of the largest emergency package loans in history and has been taking on more and more debt since. Much of its credit is coming from countries that Greece currently does a majority of its trade with. Economic growth since then has been labored and much needed political leadership has been fleeting. The government is spending money to send their youth to college and university for free and upon receiving a degree, many of these young people are leaving the country for promises of better work and job security. In a way this could be a great incentive for the government because if they can bring their economy back, it will be more favorable not only for future graduates to stay at home and contribute to their national structure and economy but also for the current youth that have gone elsewhere seeking employment to comeback. These youth are not just coming back empty handed, they are coming back with priceless knowledge of international business and structure, also pros and cons of how other societies operate and make their society work. These youth are currently out in the wide world scattered among countries, receiving valuable information that in the future can help Greece as a whole and its presence on and international stage. Many different theories have been presented on the current financial problems of Greece, by top-notch scholars and economists, who differ in opinion but
housing market in 2008, which I will go into more detail about later, created a domino effect which spread to almost every major Westernized economy, including Greece. Michael Lewis, author of The Big Short, and many Vanity Fair Magazine articles, including “Beware of Greeks Bearing Bonds” has extensively researched the recent world economic downturn in 2008, attributing the cause to a combination of overconfidence in the housing market and complicated financial trickery by big investment banks like Goldman Sachs, Lehman Brothers, and others. In “Beware of Greeks Bearing Bonds” Lewis writes in relation to corruption within Greek government, “Here, in 2001, entered Goldman Sachs, which engaged in a series of apparently legal but nonetheless repellent deals designed to hide the Greek government’s true level of indebtedness. For these trades Goldman Sachs…carved out a reported $300 million in fees” (Lewis, 13). Along with teaching Greek government to hide their nation’s debt, Goldman Sachs also taught them to identify sources of future income and turn those resources into cash which they could spend however and whenever they pleased, often putting much of the money into their own pockets
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.
The Greek people are suffering while trying to keep their jobs to pay for the rising taxes. With an unemployment rate of over 60%, the youth even have a difficult time finding jobs to help their families. Being unemployed is not only a rough situation to be in with no money is coming in, there is more to it, “The longer a person is unemployed, the less employable they become. Re-entering the workforce also becomes more difficult and more expensive.” (Rodgers 9). Not only that, but people in Greece lose their health insurance after being out of work for over 2 years. The unemployment factor is a big effect on the Greek people because of the
The article “How Germany Prevailed in the Greek Bailout” discusses Germany’s successes financially in comparison to most other (19 countries) in Europe. Although Germany has such success others see the country as a bully almost due to their militaristic background even though they have come to the aid of Greece and helped. Many other European countries are hesitant about Greece receiving aid considering the countries past failures financially. This is not the first time the country has been in debt and undoubtedly will not be the last. Since the economy fell in 2008 Greece’s unemployment rate is about 22% which is double the U.S. Due to an imbalance in European countries where some are creditors and others debtors it is difficult to fix this
Being unaware about issues on the other side of the world made me realize on intriguing economic debt crisis that is going on in countries that seem like they are holding together. Greece and the European was a great issue to discuss and view both sides before since I was unaware that there was a long going crisis going on in this side of the world. Greece can either get a so many bailouts repeatedly or they can fend for themselves to find how the country is able pay back the debt they owed the EU within the past years. In my opinion, I think that Greece should give the money from the EU to survive.
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,
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
With an area of roughly 131,957 square kilometers, approximately 50,949 square miles (“Greece Facts,” n.d.), Greece has been a predominant part of European history. This beautiful, ancient country is well-known for their vibrant history and enchanting Greek mythology. Today, however, Greece is more known for their deepening economic crisis. The tumultuous economic issues began around World War II as a result of the German occupation of Greece. Problems escalated following the occupation as the country fell into a civil war. "Communist and government troops tore the country apart."(Buchanan, 2015). In 1949, the government found themselves victorious but left with an economically broken Greece. Though the country is currently enduring hardships, there is still much hope for the future.
GDP in Greece makes the worst annual performance in nearly 30 years. This causes the investors to have lack of confidence and withdraw their investment in Greece and invest in other countries. As the investors withdraw, the firms have to lay off all their employees. The lesser the firm invest in Greece brings bad news to unemployed workers because lesser job opportunity occurs. Since the 2009 crisis, Greece’s domestic market slightly decreases causes the employees suffer with low income and benefits.
In this research paper, we will be covering the causes, financial repercussions and social implications of this crisis. We will also be examining the methods used by the Greek government to rescue the economy. To conclude, we will discuss possible resolution measures and objectively forecast the future
The financial headlines of 2012 were prevalent with the tribulations of the Greek economy. Its problems, in the eyes of many of the other nations of the euro zone, were not only negatively impacting the prosperity of the Greeks, but also the viability of the European Union. The country as a whole requires a major restructuring. Not only are drastic changes needed in financial and economic policies, but the Greeks need to understand their attitude of government entitlements cannot be sustained. The mismanagement of the Greek economy is also evident in its place in the global market community. It has not found the path that a county needs to follow to become an active member of the vibrant,
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
Over the 15 years the German has been widely viewed as the economic catalyst and stabilizer for its fellow European Union states. Even following the Financial Crisis in 2008, the German economy was able to bounce back quicker than neighboring Eurozone states the source of German success points to a high export led growth economy with a competitive manufacturing sector, lower unemployment, balanced budget, and low costs to borrow. With most economic indicators pointing to strong future growth, it remains to be seen whether a spillover effect occurs to the rest of the EU. Despite a number of reforms, EU countries continue to suffer due to lack of global competitiveness. In dire straits, Greece continues to leverage the support of the European Central Bank and Eurozone states to avoid another financial collapse. In support of Greece, Germany itself lent the country €56 billion, however Germany has begun to lose patience over Greece’s attempts to renegotiate terms of its bailout. As the German economy has persevered through economic turmoil, while Eurozone has struggled, Germany continues to be a shining light of prosperity in the European Union.
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