The figures 1a below shows the evolution of some key macroeconomic indicators for Greece from 2006 to 2010 Figure 1a GDP growth and Unemployment for Greece from 2006 – 2010 Source: IMF The Economic problems for Greece The macroeconomic problems for Greece are aplenty. The GDP is contracting and unemployment rising. Most importantly, its debt has been constantly increasing for the last many years and as of end 2010, it was 143% of its GDP (as shown in Figure 1b below) with current deficit at 13% of the GDP. The current financial mess in Greece came to the open when the newly elected government announced in October 2010 that its current deficit had been falsely reported for the last few years. This revelation led yields on Greek government bonds and interest rates for new credit to rise astronomically, meaning that it was no longer viable for Greece to raise money from the market to maintain the levels of government spending that it had been doing since many years. The key priority now for Greece to overcome its economic woes is to bring its debt to more sustainable levels with a first target of not more than 100% of GDP. Figure 1b Gross debt as percentage of GDP for Greece 2006 to 2010 Source: IMF Option for Greece to alleviate its economic woes The Greek economy enjoyed growth from 2003-2007 largely due to high government spending. Historically, public spending accounted for a large part (>40%) of the GDP. Since public spending is not a luxury that Greece enjoys anymore, it needs to bring the economy back to growth through other means with the top priority of bring debt levels down to instil investor confidence in Greece. Because Greece is a member of the EMU, it has no longer the option to devalue its currency (to help make exports more competitive) or to control its monetary policy that best suits its own economy (interest rates and inflation). Given this, Greece could consider exiting the EMU - by exiting the EMU and dropping the Euro as its currency, Greece would revert to its original currency, the Drachma. It would no longer be under the control of the ECB for its monetary policy and it can devalue its currency and let its exporters get the competitive advantage. However, this would bring largely negative effect on the investors in Greece and would affect the investment coming into Greece. The overall effect may be a little to no change in the GDP but a largely disgruntled EU. So, Greece must look at options (with staying in the EMU in mind) aimed at reducing its overall sovereign debt and improving the economy. The possibilities for Greece then are: a) Reduce sovereign debt by restructuring the debt Clearly, sovereign debt is the biggest economic problem for Greece today. It is at a highly unsustainable level of 143% of the GDP. This means that any new loans for Greece would come at very high interest rates. Now, Greece could either simply default on its debt or it could try to restructure its debt. A debt default would mean even lower investor confidence which may not be a very positive sign for Greece. It could however, try to restructure its debt by: 1) Extending the maturity of its debt 2) Reducing the face value of the debt 3) Combination of both 1 and 2 above Extending the mat
Introduction Greece is the 32nd largest economy in the world with a GDP in 2010 of US$ 320 billion (CIA factbook). Greece became a member of the EU (European Union) in 1999 and member of the EMU (European Monetary Union) in 2001. Since 2009, the Greek economy has seen negative growth…
The Euro Zone is composed of a single monetary market and heterogeneous countries. The Greek crisis signaled a crisis of the entire Euro Zone. Chronological review of the crisis unfolding is demonstrated in the paper. Origins of the crisis lay in the Greek public debt. Politically, an exit by Greece at that time could imply a disaster for the EU.
The Euro zone had been facing a huge crisis. The governments of the countries in Euro zone had gone on to accumulate higher levels of debt that could no longer be sustained by the use of the normal kind of the machineries (Nelson, 2010). There were three countries that were at the top of the debt list (Greece, Ireland and Portugal).
(Lenard, 2011) There are approximately 1,000,000 more workers interjected into the workforce each year through coming of working age, yet the creation of jobs just isn’t happening fast enough. (Lenard, 2011) Depending on which state one resides in, the difficulty in finding employment can be described as .82 workers for every position, (in Washington, D.C.) or as many as 8.24 workers for every position (in Michigan).
Frustrations of farmers getting demonstrated through blockage of border crossings, highways or ports, clearly indicates that Greeks have become distressed having no intentions to let go (Poggioli). Uncontrolled expenditure, inexpensive loans and failure to execute monetary transformations over a couple of years has left Greece in a very poor condition when the worldwide financial recession had hit.
Financially strong countries can establish themselves as a strong and unite nation. Finance helps a lot in solving number of problems of any country. United States is one of the strongest super powers of world. With the aid of finance number of factors can be change.
The paper tells that the overmedication of drugs for the young children is providing an edge to the pharmaceutical companies. The pharmaceutical companies are gaining great profits through these medications and it is believed that some of these great profits are influencing the physicians to prescribe drugs to the ADHD teens.
The strategic aims of the Bank and how does it deal with the event in order to maintain its goal. Methods of analysis the company include SWOT of Barclays along with the past events that the organization has sponsored so far and also
For instance, in the year 2009, Greece faced massive financial crisis, and in subsequence, the soundness as well as the sustainability of its financial market underwent a critical situation. Owing to the financial
The debt that the government of Greece has is a major crisis that has caught the attention of the whole globe sparkling various speculations and reactions. However, one thing that stands is the fact that if this situation is not
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