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Financial Disasters (Greece)

The document discusses the financial crisis in Greece, including the causes such as high public debt and deficit, as well as the impact on other European countries. It examines Greece's economy, imports and exports, and the austerity measures implemented to address the crisis. The financial crisis in Greece threatens other European economies and the stability of the Eurozone.

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Ahmad Muzzamir
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34 views18 pages

Financial Disasters (Greece)

The document discusses the financial crisis in Greece, including the causes such as high public debt and deficit, as well as the impact on other European countries. It examines Greece's economy, imports and exports, and the austerity measures implemented to address the crisis. The financial crisis in Greece threatens other European economies and the stability of the Eurozone.

Uploaded by

Ahmad Muzzamir
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Financial Crisis:

Greece
By: Ihsan
Muzzamir
Discussion Topics
 Background Information

 Greece’s Imports and Exports

 Causes of Financial Crisis

 Financial Crisis in Greece

 How Greece Financial Crisis Affect Others


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 World Map
Greece’s Imports and Exports
 Greece imports twice as much as they export
Greece Total Trading
( from 2009-2010 )
$80
$64
$60 $45
in billion of US $

$40
$21 $21 Greece total Exports
$20
Greece total Imports
$- Trade Balance
$(20) $(24)
$(43)
$(40)
$(60)
2009 2010
Greece Trading from Year 2009-2010
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
Greece GDP (Real Growth Rate)
3%

2% 2%
Annual GDP Growth (in %)

1%

0%
Greece GDP

-1%

-2% -2%

-3%

-4%
-4%
-5%
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 months
 Also, the extra money gave many Greeks in their early
retirement

 One of the worst countries with debt in Europe


 National debt, at €300 billion (aka $413.6 billion), is larger
than the country's economy
 Prediction estimated that the national debt will reach 120%
of GDP in 2010
 The country's deficit is 12.7% of its national economy
Who owns Greece’s debt?
Probability of Countries Being
Unable to Pay Back Debt
How Greece Financial Crisis Affect
Countries
 Contagion Effect
 If Greece is not helped, it could drag down the entire
European Union
 Threatening economies: Portugal, Spain and Italy
 The impact on the common European currency
 15 other euro zone economies who have agreed to help out
Greece
 IMF announced a bail-out package €95 billion ( $146.2 billion)
How Greece Financial Crisis Affect
Countries
 High Tax Debt
 The Government has also hiked taxes on fuel, tobacco and
alcohol
 Political unstable

 Bank Sector
 Greek people pull their money out from Greek Bank
 Greece shut down its banks to limits withdrawals money
How Greece Financial Crisis Affect Others

 Reduced wealth
 Take-home pay is likely to fall as it is eroded by rising taxes
and everyone will have to work longer before they retire
 by which time they are likely to find that their pensions have
shrunk.
 Social impact
 Poverty
 Jobless
 Inequality
 Access to Health
What policies should be
IF:
implemented?

Currency and
Real GDP
Unemployment Inflation Financial Debt
Growth Rate
Volatility
 
Solutions
 What Greece implemented
Austerity Measures
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 ?
Conclusions
 Greece’s Debt Crisis has put the EU under the scope, & it has
shifted the attention to the efficiency & the success of the Euro-
zone. It’s considered as probably the biggest test the EU (& the
EMU-in particular) has gone through. How the EU & Greece
are handling the crisis with the whole bail-out plan will reflect
to what extent the EU is able to function on its own as a
powerful economic entity.
 It’s too early yet to measure the effectiveness of the bail out
plan.

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