Financial Crisis: GreeceBy: Hong Lai

Sylvia Zheng

Discussion Topics Background Information

Greece’s Imports and Exports

Causes of Financial Crisis

Financial Crisis in Greece

How Greece Financial Crisis Affect Other Countries

Solutions

Background Information Greece, a Parliamentary Republic

Prime Minister, George Papandreou

Capitalist economy with the public sector accounting for about 40% of GDP

Member of EU Greece joined in 1981 In 2001, 12th member of the European

Economic and Monetary Union

Greece’s Imports and Exports Greece imports twice as much as they export

Greece’s Imports and Exports Exports (2009 estimated)-$21.37 billion

Manufactured goods, food and beverages, petroleum products, cement, chemicals 

Major markets: Germany, Italy, Bulgaria, U.S., U.K., Romania

Imports (2009 estimated)-$64.27 billion Food and animals, crude oil, chemicals, machinery, transport

equipments Major suppliers: Germany, Italy, France, Netherlands, Russia

Tourism is the main income for Greece Provided 15% of GDP

Causes of Financial Crisis

Causes of Financial Crisis Public debt:

126.8% of GDP (2009) increased to 144% of GDP (2010)

Inflation: 1.2% (2009) increased to 4.5% (2010)

Unemployment rate: 9.4% (2009) increased

to 12% (2010)

Current Account Balance: -$34.43 billion (2009) to -$17.1 billion (2010)

Financial Crisis in Greece Government overspending with its national debt is $413.6 billion

Paying out salaries on the government dime, with huge holiday bonuses

Employees were paid a 14-month year instead of 12 monthsAlso, the extra money gave many Greeks in their early

retirement

One of the worst countries with debt in EuropeNational debt, at €300 billion (aka $413.6 billion), is larger

than the country's economyPrediction estimated that the national debt will reach 120%

of GDP in 2010The country's deficit is 12.7% of its national economy

Probability of Countries Being Unable to Pay Back Debt

How Greece Financial Crisis Affect Other Countries

ContagionIf Greece is not helped, it could drag down the entire

European UnionThreatening economies: Portugal, Spain and Italy

The impact on the common European currency15 other euro zone economies who have agreed to help out

GreeceIMF announced a bail-out package €95 billion ( $146.2 billion)

An Explanation of Greece’s Financial Crisis Video

 Solutions

What Greece implemented Raise taxes on fuel, tobacco, and alcohol Raise the retirement age by 2 years Decrease government spending

Recommendation Sterilization

1. Decrease Unemployment

2. Fix Inflation Rates ?

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"An Explanation of Greece's Financial Crisis." YouTube- Broadcast Yourself. YouTube, 09 Apr. 2010. Web. 27 Feb. 2011.<http://www.youtube.com/watch?v=KGPNBA6T-sk>.