Greece government debt crisis-Causes, Result and Effect.

BMJames (Kenta Kasama)

Where is Greece

● Greece is belonging into the europan union.● Capital is athens.● Total area is 131,957 km2

● There are many sightseeing place such as Zakynthos Island, Olympia.

Contents● Process why ty went to collapse.● Cause of greek's collapse● Tax evasion● 2009● Accounting fraud● 2010-2014● How It made stadard of living in greece decline.

Process why it went to collapse.

1. In 1981, Greece acceded EU(European Union)2. In 2001, It introduced EUR for currency.3. In 2009, Greek’s window-dressing was discovered when it became new

government, George papandreu.4. More 10% of GDP in greek went down.

Causes of Greek’s collapse

● In 1981, Greek government was doing accounting fraud of national budget with goldman sachs by delivertive. Then, they introduced the euro .

● Government workers are 10% of whole population in Greece.● And also 25% of labor force population.● The age that people can get pension is 55 years old.● It does not have huge difference between income and pension.

○ Greek government was spending 70% of annual expenditure to these things.

● The tax evasion became common sense.

Tax evasion● is the illegal nonpayment or underpayment of tax.

○ Ex)If self-employed person’s income would be under standard, they do not issue the

payment because it is going to be tax-free.

○ Ex)Bribe.

● The government lost opportunities to gather money by tax.

2009

● New government after the greek regime change announced that 12,7% of

GDP budget deficit.(It was 3,7%)

● They lost the way to procure funds by using issue of government bonds.

○ Because of losing credit-worthiness of country.

● Other country’s bond (PIGS)has also been slumped.○ The European sovereign debt crisis

● It effected on not only europian stock prices but also american and

japanese.

Credit Default Swaps

● is the index which shows that country’s creditworthiness to be able to return the borrowing.

● And also people can assume how many year that country can survive.

2010-2014

● Greek government agreed with getting a loan of 110 billion euros from EU .● And also agreed with getting a loan of 5.5 billion euros from IMF.● They got 62 billion and 74 billion euro of bollowing from ELA and ECB.

Then greek government promissed to reduce the 30 billion euros of budget deficit in three years with EU.

However, It occured striking of citizen because it made lower standard of living.

How It made standard of living in greece decline

1. Unemployment rate is more than 20%.2. Young unemployment rate is exceeded 50%.3. Outflows was happend by declining credit-worthiness.4. They fired too much government workers.5. They reset the pension to lower.6. They increased tax price.

2015 (Effection)

● The “SYRIZA”which tsipras is representative became official party in greece.

● They insisted on that germany has to pay 162 billion euro for compensation of world war 2.

● IMF is going to stop to give a loan anymore because the possibility of default that greece might not return money is high.

● Leaving from EU was decided. How can they borrow money!!!!!

Videos

https://www.youtube.com/watch?v=ULQiCN0YNmw

Conclusion

● They can do nothing.

References

http://www.nationaldebtclocks.org/debtclock/greece

http://www.tradingeconomics.com/greece/government-debt-to-gdp

http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=0

http://www.greekcrisis.net/

http://www.myfinancetimes.com/2011_12_01_archive.html

Thank you for listening!!!!!