Financial crisis of Greece

• President:  Karolos Papoulias (2005)• Prime Minister:  George Papandreou (2009)• Population (2009 est.): 10,737,428 (growth rate: 0.1%); birth rate: 9.4/1000; • Monetary unit:  Euro

o Greece, a developed country with a high standard of living and very high Human Development Index;

o A top five tourist destination since at least the 80s

o Greece had shifted to the Euro in 2001.

• Economic summary: 

GDP (2009est.): $341 billion per capita $32,100   Real growth rate:  4%.  Inflation (2009 est.) :  1.2% Unemployment (2009 est.) : 9 % Exports:  $25.76 billion Imports:  $79.92 billion

•Greece crisis

Debt Crisis of Greece

Greek government funding crisis

Greece has a 12.7% deficit of its GDP.

National debt has exceeded 300 billion Euros.

Greece has US$ 25 billion dollar of its debt that must be immediately re-financed

1. Debt crisis

• The Greek government requested that the EU/IMF bailout package (made of relatively high-interest loans) be activated.

• The Euro zone legally requires that national deficit be within a 3% limit if GDP.

• With Greece’s deficit of 12.7% of the GDP, the European Central Bank is legally not allowed to engineer a typical bail-out, partly due to political aspects of the EU treaty.

• The size of the bailout is expected to be €45 billion ($61 billion) and it is expected to take three weeks to negotiate

• With a payout within weeks of €8.5 billion of Greek bonds becoming due for repayment.

• Fitch ratings has called Greece as “Eurozone’s weakest member”

• Greece’s debt is 113%of its GDP.

• Greek Government Funding Crisis:

• The Greek economy was one of the fastest growing in the euro zone during the 2000s

• From 2000 to 2007 it grew at an annual rate of 4.2%

• Estimated tax evasion costs the Greek government over $20 billion per year.

• Investors placed about €20bn ($28bn, £17bn) in orders for the five-year, fixed-rate bond

• Greek crisis hurts EU reputation

• A default by one member of the 27 participants in the Euro-zone will lead to the collapse of the Euro

• Countries of the European Union are allocating 20 to 25 billion Euros to Greece as a rescue package to help it get over the financial crisis

• Expectations of a weaker Euro, dollar becomes stronger relative the Euro

• Greece must change or sink!

• Real estate industry

• Greek political parties

• Systemic corruption and “clientelism

• Tax inspectorate

• Health sector

Thank You