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Greece financial crisis vj2011
 

Greece financial crisis vj2011

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    Greece financial crisis vj2011 Greece financial crisis vj2011 Presentation Transcript

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