Greece financial crisis vj2011

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Greece financial crisis vj2011

  1. 1. Remember the Economic Systems !<br />Capitalism: Is about people owning business with little government involvement. It’s about making profit<br />Communism: Government controls businesses and there is no private ownership<br />Socialism: Some Government involvement with the businesses and taxes are high<br />
  2. 2. But Economic systems are much, much more complicated….. <br />
  3. 3. The Euro Zone Financial Crisis!!!!<br />By: VJ Mohit<br />Grade:6<br />Home base: Mr. Freeman <br />
  4. 4. FACTS ABOUT GREECE<br />Country: Greece<br />Capital: Athens<br />Form of Government: Parliamentary Republic<br />Population: 10, 722, 816<br />Currency : Euro<br />
  5. 5. FACTS ABOUT GREECE…cont.<br />Greece abolished its monarchy in 1975<br />Under the Parliamentary republic there is a Prime Minister and a President<br />The Prime Minister has the most power<br />Greece became part of the European Union in 1981<br />
  6. 6. WHAT IS EUROPEAN UNION<br />The European Union is a political and economic group of European 27 countries<br />EU has free movement of people, goods, services and money.<br />So what happens in one country’s economic system affects another country. <br />
  7. 7. HOW DOES MONEY FLOW?<br />Countries and private businesses need money<br />Government gets some from taxes and borrows some from other countries and banks<br />Borrowed part is called principal and the extra cost for borrowing is called the interest.<br />Many countries in the EU have borrowed a lot and now cannot pay back<br />In Greece it is assumed that almost half of the money borrowed (called debt) which includes the principal and the interest can not be repaid back<br />
  8. 8. WHY DID THIS HAPPEN IN GREECE?<br />Greece has been living beyond its means in recent years<br />Greek government borrowed a lot and then spent a lot after it adopted the euro €<br />Public sector (another name for government) salaries doubled in the past decade.<br />Government spent a lot but could not collect enough tax because of widespread tax evasion<br />
  9. 9. IMPORTANT DETAILS !<br /> <br />More than 5 million Greeks did not pay income taxes for 2008<br />Many Greeks are not reporting their income to avoid paying taxes<br />Taxes that people pay is money that goes towards the Government.<br /> In the case of Greece the money being spent was more than the Government was earning<br />
  10. 10. HOW DOES IT AFFECT OTHER COUNTRIES?<br />Greece owes money to many other European countries and banks<br />If it can not pay it back, these countries and banks loose money<br />Those countries and banks then have less money for their own government and private businesses<br /> Greece is not the only country affected in this way, other countries are Italy, Portugal, Spain<br />
  11. 11. WHAT DOES IT MEAN FOR YOU AND ME?<br />As you know many goods are now days made in Asia because of low costs and skilled people<br />But these goods and services are also bought by government and private businesses in the EU <br />If governments or private businesses do not have money to buy these goods and services from Asian producers it means Asian businesses suffer and people here loose jobs<br />
  12. 12. SO THAT MAKES ME ASK SOME QUESTIONS?<br />Why were governments allowed to spend so much?<br />Who controls the governments<br />Why didn’t the banks tell the governments to stop borrowing?<br />….like I said economic systems are complicated…..but very interesting….!<br />
  13. 13. Chinese <br />Govt.<br />China <br />Chinese shoe making factory<br />T<br />Chinese <br />Workers<br />$<br />NIKE manager’s salaries<br />INDIA<br />For raw material like leather<br />Indian Farmer for the cow skin<br />Govt.<br />T<br />$<br />The Story of<br />VJ’s NIKE Shoes<br />Nike<br />US<br />Govt.<br />Builds roads<br />Philippines Govt.<br />$$<br />Philippines business’ loans <br />T<br />Pays for the soldiers in Afghanistan<br />Philippines Shop Owner<br />$<br />To Greece as a Loan<br />$$<br />$<br />
  14. 14. RESOURCES<br />CNN Website: A Greek tragedy: How the debt crisis spread like a virus in 'Contagion'<br />http://news.blogs.cnn.com/2011/09/19/a-greek-tragedy-how-the-debt-crisis-spread-like-a-virus-in-contagion/?iref=allsearch <br />BBC Website: Eurozone crisis: What turmoil means for you<br />http://www.bbc.co.uk/news/business-14418290<br />

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