By: Hong Lai
Sylvia Zheng


Background Information
 Greece’s Imports and Exports

Causes of Financial Crisis

Financial Crisis in Greece

How Greece Financial Crisis Affect Other Countries

Solutions


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, 12 th member of the European
Economic and Monetary Union


Greece imports twice as much as they export
Greece Total Trading
( from 2009-2010 )
$80
$60
$40
$20
$-
$(20)
$(40)
$(60)
$64
$21
$(43)
$45
$21
$(24)
Greece total Exports
Greece total Imports
Trade Balance
2009 2010
Greece Trading from Year 2009-2010


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

3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
Greece GDP (Real Growth Rate)
2%
2008 2009
-2%
2010
-4,20%
Greece GDP


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)


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


Contagion

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)


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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