Greek's Economic Crisis
Ever since the global economic crisis in 2008-2009, much of the world's economy has changed dramatically, and slipped into a recession. This has proved to be a serious challenge for some countries in Europe, especially Greece. Greece's debt became a major threat to not just it's own economy, but to entire Europe too. In 2010, the IMF gave Greece a major package of financial aid, and Greece set up economic reforms in an attempt to prevent their public debt from increasing even more. These austerity measures have put many of Greece’s work force out of their jobs. Greece is currently at their all time high in unemployment at about 17%, and nearly 50% of citizens under the age of 25, young and well educated, are unemployed. With the Greek government raising taxes and the price of everyday items going up, Greeks are getting frustrated at how hard life is getting. Many feel that it is unfair that Greece's people are the ones who have to be punished for the governments careless actions, and are joining together to protest. While the Greek government struggles to pull their country out from a deep economic crisis, their financial alliance with the eurozone lies at risk, as other european countries begin to suggest that it's countries like Greece that are going to decrease the value of the Euro, and be the main cause of Europe's economic collapse.
Important People and Terms
George Papandreou- Greece's Prime minister from October, 2009, to November, 2011. An opinion poll from May, 2011, showed that 77% of Greeks had no faith in Papandreou as prime minister, and his ability to handle the economic crisis.
Lucas Papademos- Greece's current prime minister, he was appointed by George Papandreou in Novermber of 2011 after Panadreou resigned from his position.
IMF- The International Monetary Fund is a global organization that works to promote jobs, help facilitate cooperative economic relations, stimulate international trade, and reduce the world's poverty.
Eurozone- The economic and monetary union of the European Union.
EU- The European Union is a group that was created in the late 1940's to help unite Europe in both political and economical ways.
Austerity Measures - An official action taken by a government in order to reduce the amount of money that it spends or the amount that people spend. The most common example of "austerity measures" occurs when a sovereign government's bond rating is downgraded. This makes borrowing more expensive, and usually forces the government to impose these new measures.
Default- failing to pay back a loan and increasing one's debt.
Tax Evasion- avoiding tax payment.
Write-off- When a loan is deemed uncollectable because of a large portion of debt and will most likely not be repaid anytime soon.
Referendum- A general vote by the people on a single political question, proposed legislative act, law or amendment, that has been referred to them for a direct decision.
Creditor- A person or company to whom money is owed.
Lucas Papademos- Greece's current prime minister, he was appointed by George Papandreou in Novermber of 2011 after Panadreou resigned from his position.
IMF- The International Monetary Fund is a global organization that works to promote jobs, help facilitate cooperative economic relations, stimulate international trade, and reduce the world's poverty.
Eurozone- The economic and monetary union of the European Union.
EU- The European Union is a group that was created in the late 1940's to help unite Europe in both political and economical ways.
Austerity Measures - An official action taken by a government in order to reduce the amount of money that it spends or the amount that people spend. The most common example of "austerity measures" occurs when a sovereign government's bond rating is downgraded. This makes borrowing more expensive, and usually forces the government to impose these new measures.
Default- failing to pay back a loan and increasing one's debt.
Tax Evasion- avoiding tax payment.
Write-off- When a loan is deemed uncollectable because of a large portion of debt and will most likely not be repaid anytime soon.
Referendum- A general vote by the people on a single political question, proposed legislative act, law or amendment, that has been referred to them for a direct decision.
Creditor- A person or company to whom money is owed.
Timeline
2009December
* The anniversary of teen killed by police the previous year sparks protests * Greece's credit rating goes down * George Papandreou, Prime minister at the time, announces the first of many public spending cuts |
2010Janruary
* Greece increases it's spending cuts, including public sector pay cuts, higher fuel prices, and warns that tax evasion will be taken much more seriously February * The government's spending cuts create difficult economic times and spur protesting by Greek civilians that carry on through March April * Eurozone countries approve $145 Billion bailout package for fears that Greek's ability to pay back loans will only decrease * Papandreou announces even stricter austerity measures to come * Trade unions protest by setting up multiple strikes October * Austerity measures increase along with new taxes and inflation on goods |
2011February
* International lenders critique Greece on it's efforts, expressing that they have not gone far enough with their austerity measures June * Thousands of angry Greeks march to parliament to oppose new austerity laws, proposed by the government, in a 24 hour protest July * European Union leaders agree on another bailout of $109 Billion * Credit rating agencies downgrade Greece's rating to a level that is sure to default September * Eight of Greece's banks are downgraded by Moody's, a credit rating agency, over concerns that Greece will not be able to pay back it's debt October * Eurozone agrees to write-off 50% of Greece's debt in return for greater austerity measures * The prime minister announces that a referendum will be held regarding the rescue package November * George Papandreou is heavily criticized for the referendum, extracts it, and resigns from his position as prime minister, appointing Lucas Papademos to take his place |
2012January
* Debt rescheduling talks with Greece's creditors begin to stall * Plans for the $130 billion rescue package promised by the EU and IMF that Greece needs in order to be able to pay off their next debt repayment due in March are dramatically impacted February * Due to Europe's demands, the Greek government passes another set of austerity laws * Violent protests increase in the city of Athens March * A "debt swap" deal is made between Greece and it's private lenders, allowing it to cut its debt in half * The "debt swap" satisfies the EU's finance ministers, enabling the plans for the $130 bailout to resume |
Greece's Social Conditions Under the Current Revolution
Statistics and Facts 1) The unemployment rate in greece is 17%.
2) 48% of Greeks under the age of 25 are unemployed. 3) 20% of Greece is in poverty, yet food shortage is not a major concern. 4) As of July, 2011, The U.S. Department of State recommends that when traveling to Greece, "As a result of recent austerity measures imposed by the government, labor unions, certain professions, and other groups affected by the current financial crisis hold frequent demonstrations, work-stoppages, and marches throughout the center of Athens. Strikes in the transportation sector often affect traffic and public transportation, to include taxis, ports, and airports; most are of short duration, but you should always reconfirm domestic and international flights before heading to the airport. If you plan to rent a car, ask your rental agent about possible interruptions to fuel supplies. " |
What They Mean1) The current unemployment rate in the United States vacillates between 9% and 10%. Many Americans are already upset and frustrated with these kinds of conditions, even though Greece's habitants have to deal with unemployment rates that are nearly twice as high. Therefore, one can imagine the kind of anger that is coursing through the country, and understand why protests are increasing.
2) Most people under 25 would be in the midst of their college education, some perhaps about to begin it. Yet 48%, that's nearly half, of Greece's youngest and brightest people cannot find jobs for themselves or pursue a career. One of the major causes for a revolution is when a country has a large group of young well-educated people that cannot even sustain themselves financially; It creates a generation that cannot find hope in their country, and it's oftentimes the youth that feel most passionate about change. 3) Many other countries experiencing revolutions at this time have a people that are unable to feed their families, and are in this form, frustrated and upset with the government. Greece does not have a shortage of food, yet many of it's people are having trouble providing food for themselves. It is because of the Government's tough austerity measures, that inflation on food and other domestic goods has increased dramatically. This is the element that causes tough times for the Greeks, and is essentially what angers them, spurring protests. 4) Much of Greece's GDP comes from income produced through tourism, and related services. Yet the recent amount of "issues" going on in Greece displayed in the Media do not project a particularly appealing travel destination to international travelers. The unrest of Greece has dramatically decreased tourism in the country, which does not benefit Greece's economic situation in the slightest bit. But if a countries revolutionary agenda would cause a traveler to need to frequently check with their hotel for safety information, or the suggested idea that one might need to contact their car service to make sure that fuel shortage will not be an issue, then that certainly displays the intensity going on in the country right now. |