GREEK/ WORLD ECONOMIC CRISIS AND

PUBLIC SECTOR

Δήμητρα Παππά 2494 Group Leader

Μαρία Αποστόλου 2339

Χριστίνα Νάκα 2475

Παναγιώτα Χριστοδούλου 2562 Κ.

Εισηγήτρια: Θεοδώρα Τσελίγκα

SECTIONS:1. Introduction2. Greek economic crisis2.1. Greek/ World economic crisis2.2 Impacts of Greek economic crisis3. Greek crisis and public sector3.1 The public sector in Greek economy

(significance)3.2 Impacts of crisis in public sector4. Future Prospects5. Conclusion

1. Introduction The financial crisis that erupted in the

United States in September 2008 “hit” crucial the economies of many countries around the world. Each country has experienced or still experiencing the financial crisis differently depending on the structure of the economies. Soon the financial crisis transformed into an economic crisis when banks in their effort to maintain their capital adequacy restricted the credits to businesses and households.

2. Greek economic crisisThe international financial crisis struck soon

the Greek economy and Greece fled to the IMF, the ECB and the EU in order to avoid any problems relating on wages which would have uncontrolled consequences for the entire euro zone.

2.1 Greek economic crisisRegarding the Public debt the period after

1974 was a large lending period for Greece that led the debt to its swelling.

Decades 1970-1979

1980-1989

1990-1999

2000-2009

Consumption as % of GDP

77,2 85,1 90,1 88,8

Investments as % of GDP

30,7 23 20,6 22,6

2.2 Greek economic crisisAdditionally the external debt of Greece was

82,5% of GDP in 2009.The negative trade balance means that Greece imported more than it exported.

Decades 1990-1999 2000-2009

Trade balance as % ofGDP.

-10,7 -11,4

2.1 Greek/World economic crisisThe global economic downturn of 2008 is the

effect caused by the international financial crisis of 2007.The international financial crisis caused by the lack of liquidity became apparent in the Stock market indexes all around the world with dramatic effects on the banking system , trading and businesses.

On October,24,2008 there were losses $3,2 trillion in Eurasia. Especially , in Greece there were losses 24 billion Euros in the second half of 2008.The Athens general stock market index fell below 1800 points.

2.2 Impacts of Greek economic crisisLiquidity problems in banks ,companiesReduction of turnoverHigh rate of unemploymentReduction in production in national income

etcBankruptcyLow public revenuesHigh debt levelsHigh deficits

3.Greek crisis and public sectorThe public sector of Greece consists of

various public entities which are responsible for the governance of the state, to serve and protection of citizens and the conduct of fiscal policy in Greek economy.

The Greek economy for several decades was rising. From 1950 until 1970,the development named as the Greek economic miracle.

3.Greek crisis and public sector

The economy sank into deep and sharp recession in 2008 due to the global economic crisis struck the euro zone and Greece as a member state.

Finally, there are still hopes for quick recovery in Greek economy.

3.Greek crisis and public sector

3.Greek crisis and public sector

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

50

100

150

200

250

300

General government gross dept - annual data (percentage of GDP)

Greece

EU (27 countries)

3.1 The public sector in Greek economy

3.2 Impacts of Greek crisis in public sector

Since crisis expanded in Greece the wages of many public employees have decreased in half.

At the same time , other public employees have been fired the last period because government can not ensure them salaries of a satisfactory.

3.2.1 Impacts of Greek crisis in public sector

Moreover , from 2009 and after the budget is deficit . Thus , the public expenditures have been reduced and the taxes have been increased to the public.

Also , government borrows from external banks but that money are abused from public officers.

In the end government is selling off public property.

3.2 Future prospectsThe deficit in 2009 as a percentage of GDP is

15,9 , in 2013 drops to 5,5 and today is about 4,6 so it is obvious that there is a reduction during these periods.

Moreover government can manage to balance the budget ,create primary balance and remained in euro.

Conclusion

The economic policies of the last three decades have brought Greece to the brink of bankruptcy . Thus Greece is characterized by inefficient public sector and low competitiveness . However the positive point is that there are bands for furthermore development and progress . So Greece can manage to overcome the crisis , to consolidate the public sector and get out again on international markets if there is a consent of all both governments and citizens.

REFERENCES http://

www.imerisia.gr/article.asp?catid=26510&subid=2&pubid=113222834http://el.wikipedia.org/wiki/%CE%94%CE%B7%CE%BC%CF%8C%CF%83%CE%B9%CE%BF%CF%82_%CF%84%CE%BF%CE%BC%CE%AD%CE%B1%CF%82

http://el.wikipedia.org/wiki/%CE%9A%CF%85%CE%B2%CE%AD%CF%81%CE%BD%CE%B7%CF%83%CE%B7_%CF%84%CE%B7%CF%82_%CE%95%CE%BB%CE%BB%CE%AC%CE%B4%CE%B1%CF%82

http://el.wikipedia.org/wiki/%CE%9A%CF%81%CE%AC%CF%84%CE%BF%CF%82_%CF%80%CF%81%CF%8C%CE%BD%CE%BF%CE%B9%CE%B1%CF%82

http://en.wikipedia.org/wiki/Economy_of_Greece http

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http://nemertes.lis.upatras.gr/ Η οικονομική κρίση στην Ελλάδα :Μεταρρυθμίσεις και

ευκαιρίες στην Ελλάδα σε μια κρίσιμη συγκυρία , Δημήτρης Βαγιανός ( London School of economics , CEPR και NBER ) Νίκος Βέτας (Οικονομικό Πανεπιστήμιο Αθηνών και CEPR)

Κώστας Μεγήρ ( Yale University ,University College London and IFS .