The Greek Financial Crisis has become a major issue in Greece and in Europe. This slideshow will discuss you with the background, effects, reasons, and future outloo k

1. The Greek Financial Crisis:

2. The Greek Financial Crisis: The Past
 The Facts of the Past:
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Joined the EU in 1991
Old Currency: The Dharma
Population: 11.2 mil
Major Industries: Tourism & Shipping
 Reasons of Joining EU
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Access to a competitive market
Solidarity (Euro connection)
Stability
Efficiency

3. The Greek Financial Crisis:
 http://www.youtube.com/watch?v=7inY3k8y4d0

4. The Greek Financial Crisis: The Past
 Initial Success in Euro Switch
 Increase wages, Early retirement,
 High pensions, Low interest rates,
 Foreign investment
 Maastricht Treaty Obligations:
 Debt Limit Max. 60% GDP (113% in 2009)
 Annual Deficit Max. 3% GDP (14% in 2009)
 Reveals 300 bil. debt. Highest in modern history (2009)

5. The Greek Financial Crisis: The Past

6. The Greek Financial Crisis: The Past
 Major Crisis Factors:
 Mismanagement of
Funds
 Inefficient Public
Structure
 Trade Imbalances
 Govt. & Upper Class
Corruption
 Tax Evasion (25-30 bil.
Euros)

7. The Greek Financial Crisis: The Present
 2010; Greek Gov’t Bonds become “Junk”, Can not privately
finance
 on 2 May, the Eurozone countries and the International Monetary
Fund (IMF) presented a €110 billion bailout loan for Greece. It was
based around 3 key points:
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2.
3.
Implementation of austerity measures.
Privatization of government assets worth €50bn by the end of 2015
Structural reforms, to enhance competitiveness.
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What is Austerity?
Austerity is a government method of covenants with the
goal of re-stabilzing its debt deficit. Examples:
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Lowered Spending
Increased Tax

8. The Greek Financial Crisis: The Present
Results of 2010 bail out
 Record increase in unemployment
 Abolishment of the trust between the Greek people and the Gov’t.
 Greek economic conditions worsened
2011-2012; Bail Out #2
 Further implementation of Austerity conditions
 All holders of Greek gov’t bonds had to agree to incur a 53% loss
(extremely unpopular)
 €130 billion
 Troika (EU, ECB, IMF) monitor all loans to Greece
 Greece to resume using the private capital markets for debt
refinance and as a source to partly cover its future financial needs
2013; Speculation of a 3rd Bailout
 Rumored that Greece still needs €50 billion from 2015-2020

9. The Greek Financial Crisis: The Present
Fun Facts
 Rumors of hypocrisy, national self interest conspiring of
EU nations trying to take advantage of Greece
 Huge protests from Greek people who feel they are being
cheated by lenders and are at war with them.
 Greece has lost 40% of its disposable income since crisis
began
 Greek stock market has dropped 85% in less than 4 years

10. The Greek Financial Crisis: The Present
 Greek currently 160% of GDP, 120% by 2020 (goal)
 Unemployment sitting near 30%
 Wages last two years have fallen 12%
 More than 1.1m jobs lost in the private sector in the past
four years
 Market rigidities in Greece, including state monopolies,
price-fixing by local producers and restricted shopping
hours, keep prices of goods higher than elsewhere in the
eurozone.

11. The Greek Financial Crisis: The Future
 What would happen if Greece left the Eurozone?
 Greece would have the ability to print currency
 Could cause other countries to follow Greece out of the
Eurozone
 Greece’s absence would cause a decrease in value in the Euro
 Would face minimal austerity measures

12. The Greek Financial Crisis: The Future
 If Greece stays in the Eurozone and accepts additional
bailouts…
 Greek bank would continue to take losses and continue to
take on more debt
 Austerity measures could be unproductive because of high
unemployment rates
 Private sector will continue to struggle

13. The Greek Financial Crisis: The Future

14. The Greek Financial Crisis: The Future
 What needs to be done?
 Tax structure reform (Lagarde List)
 Business regulatory reform
 Less regulation to encourage competition
 Continue to make efforts to increase tourism
 Restore faith in the government

15. Questions
 Do you believe Greece should leave the Euro zone or stay
within it?
 What do you believe Greece should do to rebuild their
economy and to restore faith in the government?
 Will they make a full recovery?