Quick Facts

Full Name Hellenic Republic

Population 10,775,642 (July 2015)

Capital Athens

Largest City Athens

Official Language Greek

Major Religion Eastern Orthodox Christianity (official)

Life Expectancy Male: 77.38, Female: 83.82

Monetary Unit Euro

Government Unitary parliamentary constitutional republic

President Prokopis Pavlopoulos

Prime Minister Alexis Tsipras

GDP (PPP) $294 billion (2015)

Per Capita $26,773

Gini (2014) 34.5

Greek History in Brief

• Greek civilization began around 3000BC, with the Minoans, who were followed by Myceneans, who lasted till 1100 BC.

• After this, A ie t Gree e e tered a Dark Age that lasted u til 800 BC, he Greeks ega to e plore sea. • Arou d 480 BC, a golde age ega that a e to e k o as Classi Gree e, hi h is he it ear ed the a e the irthpla e of western

i ilizatio . • In 146 BC, Roman conquered the Greek Empire.

• Around 300 AD Greece became part of Byzantine Empire.

• Early 16th Century – came under Ottoman Turk rule.

• Gained independence from Turks in 1830.

• In WWI fought on the side of allies but communism and fascism was quite prevalent.

• Greece was occupied by Nazis in WWII

• Communism was defeated in Greece 1949 and 1952 Greece joined Nato

• For a short period military dictatorship took over but ended in 1974 with democratic elections creating parliamentary republic

• Greece joined European Union in 1981

Historical Timeline of international

Dominant currencies.

Current Issue

What is Sovereign Debt Crisis?

A sovereign debt crisis is generally defined as economic and financial problems caused by the (perceived) inability of a

country to pay its public debt. This usually happens when a country reaches critical high debt levels and suffers from

(perceived) low economic growth which results in loan defaults and rescheduling of loans or bailout packages from other

countries or international bodies.

Debt to GDP (2014) : 177.10 %

As of 09-Aug-2015

Timeline of Events

1999 2000 2001 2004

Earthquake hits Athens on

Sept 7 with a magnitude of 6.0

Los of $3 billion

Badly affected by the

late 2000’s financial crisis Greece joined Euro Zone

Hosted the Olympics and along

with the decade long debt borrowed

additional $15 billion from Eurozone banks

2008 2009 2010 2011

Global Recession and credit

availability became a

major concern.

Reports revealing the falsifying

of reports by understating

the deficit figures.

Deficit was rest to 113% of GDP

Failed bailouts. IMF and

ECB issued the initial

bailout worth $264 million,

which was used to pay the unpaid debt.

George Panpandreou

resgins as PM

Gree e’s redit rating was downgraded.

Prior to 1999

Up until 1994, Greece recorded very high deficits, for some years

above 10% of GDP.

Budget Deficit (Actual)

1997: 6.44%

1998 : 4.13%

1999 : 3.38%

During the late nineties, according to the figures submitted by the

Greek government to the European Union, Greece's high

budget deficits were significantly lowered

Availability of Credit was a major concern for Greece and all the

credit available was at a relatively higher rate of interest.

Triggers

Greece Entering

Euro Zone

Debt to GDP Ratio

Govt. Borro i g’s

and spe di g’s

Tax

Collection

Issues

Greece Entering Euro Zone

Greece had immediate access to high amount of

cheap credit

Gree e e ide tl ooked it’s books to show it had deficit < 3% of GDP in order to be eligible to join Euro Zone

Misalignment of Monetary Policy (set by ECB) and Fiscal

Policy (set by the Greek Govt.)

44%

19%

12%

22%

EPSF Eurozone

Private Investors Banks

Debt

Debt to GDP Ratio

100 106.1 105.4 112.9 129.7

146

171.3 156.9

175 177.1

0

50

100

150

200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mo

ne

y in

Bill

ion

Year

• Generally, Government debt as a percent of GDP is used by

investors to measure a country ability to make future

payments on its debt, thus affecting the country borrowing

costs and government bond yields.

• Due to easy availability of cheap credit, Greece was taking

more and more debt in order to pay its previous debt.

Debt to GDP trend

Go er e t Borro i g’s/Spe di g’s

44.6 44.9

46.9

50.6

54 52.2

54 54.4

60.1

40

45

50

55

60

65

2006 2007 2008 2009 2010 2011 2012 2013 2014

Govt. Spending as % of GDP

• Helped by its decision to join the euro in 2001, Athens kept on

spending. The new currency kept borrowing costs down and made it

easy to secure funds from commercial banks at rock-bottom interest

rates, increasing its dependence on cheap loans to fill the spending

gap.

• Public sector wages doubled and departmental spending soared.

• Already high defence costs continued to soar, propelled by years of

antagonism with its neighbour Turkey.

• Athens was poorly prepared for the 2008 crash - living off easy credit,

while spending on wages and defence soared, and taxes began to fall

away

2.7 3

3.2

2.6 2.4 2.3 2.2 2.2

1.7 1.7 1.8 1.7 1.6 1.5 1.5 1.5

0

0.5

1

1.5

2

2.5

3

3.5

2007 2008 2009 2010 2011 2012 2013 2014

Defence Spending as % of GDP

Greece NATO - Europe

Tax Collection Issues

1/3 of Greeks are self employed

High income to debt ratio

Income 1.92X of what is reported

Potentially 10B – 30B Euro uncollected

Unemployment

55% (15-28 age) Tax Evasion: Ratio of Debt Payment/Income being > 1

Current Scenario

• After 6 ears of re essio , Gree e’s e o o expanded by 0.8% in 2014 and is projected to expand

by 1.6% in 2015.

• Unemployment Rate: 26%

• Youth Unemployment Rate: 51%

• Debt to Equity: 174.9%

• Consumer Confidence: -30%

Current Credit Rating:

S&P Moody’s Fitch

CCC+ Stable Caa3 rur CC stable

In Feb 2015 the radical left Syrizia part won the General

Election, Alexis Tsipras being the new leader.

Gree e Leaves ehi d atastrophi austerity, it leaves behind fear and authoritarianism, it leaves behind 5 years

of hu iliatio a d sufferi g.

Platform:

• End Austerity

• Renegotiate Euro bailout

plan

• Retain dignity to all

Greek people

Uncertainty

What EU wants? • Continue Austerity

• Save and Growth Pact

• A govt. debt to

GDP ratio of 60%

or below

• A max deficit of

3% or less of GDP

What Greece Wants?

End Austerity

Referendum Results

Latest Update

After a 17-hour summit, Europe's leaders have reached a deal. If the Greek parliament passes a package of reforms by

Wednesday night, the country's creditors will move forward with a third bailout on terms that are much stricter than previous

proposals. If the deal proceeds, it will avert the immediate chaos that Greece's uncontrolled exit from the euro area would entail,

and enable European leaders to talk about something else for a while.

The Greek parliament passed sweeping austerity measures demanded by lenders to open talks on a new multibillion-euro

bailout package to keep Greece in the euro, but dozens of hardliners in the ruling Syriza party deserted Prime Minister Alexis

Tsipras. The package was approved with 229 votes in the 300-seat chamber. There were 64 votes against it and six abstentions.

Greece is on track to complete a draft deal on a third bailout by Tuesday and possibly get a first disbursement by Aug. 20 to

meet a key payment, sources familiar with a conference call of senior EU finance officials late on Friday said. Athens is

negotiating with European Union institutions and the International Monetary Fund for up to 86 billion euros ($94 billion) in fresh

loans to stave off economic collapse and stay in the euro zone.