The Greece Debt Crisis

3186 Words13 Pages
Chapter 1: Introduction
Historically, financial crises have been followed by a wave of governments defaulting on their debt obligations. The global economic history has experienced sovereign debt crisis such as in Latin America during the 80s, in Russia at the end of the 90s and in Argentina in the beginning of the 00s. The European debt crisis is the most significant of its kind that the economic world was seen started from 2010. Financial crises tend to lead to, or exacerbate, sharp economic downturns, low government revenues, widening government deficits, and high levels of debt, pushing many governments into default. Greece is currently facing such a sovereign debt crisis and Europe’s most indebted country despite
…show more content…
This is because one of the main reasons was the enormously high prices for the prices for the trips and services for the visitors. Greeks decided to overcharge the tourist and at the end the tourist started to choose often a close other place such as Turkey which has beautiful places with an excellent service and much lower price. This situation has added one huger problem to the previous one. Furthermore, in 2004 Greece was hosting for the summer Olympic Games. The costs for this event were huge because the government had to build new facilities such as airports, roads, hotels and the stadiums around the Athens. Greece also had to complete new transportation plan of rebuilding the Athens infrastructure and clean up the whole city. Hosting the event cost almost 9 billion euro or 11 billion dollar at today’s exchange rate, making the 2004 games was the most expensive ever at that point. Greek taxpayers were on the hook for 7 billion euro, which did not include the cost of extra projects such as a new airport and metro system. The cost created a high budget deficit in the next year, beside the decrease in tourism. There were differences between the Athens Olympic Games and 2000 Sydney also 2008 Beijing that Greece was not as wealthy or large as Australia or China to absorb losses on Games. Most of the countries which hosted the Games were at the time economic powerhouse and not developing countries such
Open Document