The Greek Financial Crisis

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The Greek Financial Crisis :

The Greek Financial Crisis By: AlyssaLynn Held

How The Debt Started:

2001 -> switch to drachma to euro 2008 -> stock market crash 2009 -> Greece admits to altering deficit numbers 2010 -> Greece enters state of financial crisis Greece was spending money they didn’t have and put themselves in a financial hole as a result How The Debt Started

Social Norms in Greece:

Early retirement Generous benefits Well paid public workers Tax evasion Social Norms in Greece

How Bad is the Debt?:

Current Debt -> 351 Billion euro First two bailouts total -> 240 Billion Euro Greece owes all this money plus interest How Bad is the Debt?

Conditions of the Loans :

Budget cuts Tax increases Ending to tax evasion Cutting pensions Reduced pay for public workers Raised retirement age Cuts to social programs Privatizing state assets Conditions of the Loans


“[In exchange for] aid from richer EU governments, Greeks must accept draconian austerity measures,” he wrote. “These would further drive up unemployment, and shrink Greece’s economy and tax base at an alarming pace, placing in jeopardy eventual repayment of Athens’ remaining debt. … As currently constituted, a single currency may serve the One Europe designs of France and Germany, but make Greece and the other Mediterranean states nothing more than the victims of a northern conquest.” –Pete Morici

How the Greeks Feel:

Not happy about the austerity rules Agree to maintain EU membership Don’t want to be in perpetual debt How the Greeks Feel

If Greece Defaults :

Value of the drachma would be very low Cheap exports Banks that loaned money would need bailouts Economies would suffer Other countries might do the same If Greece Defaults

Why Haven’t the Loans Helped?:

Economy is down 25% in the past 5 years Loans being used to pay off international debt No money is being put into Greece’s economy Why Haven’t the Loans Helped?

Germany is Benefiting :

Wealthy Greeks left and went to Germany Invested money in German bonds Lowered borrowing costs for Germany Interest off of Greek debt Investors are tied up in medium and long term bonds Germany is Benefiting

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