Greece has faced major economic problems due to years of unrestrained spending, cheap lending, and failure to implement effective financial reforms or collect taxes. This has led to a national debt exceeding €300 billion, over 120% of GDP. Harsh spending cuts and tax hikes aimed at addressing the crisis have been met with public protests. While other European countries have agreed to a rescue plan involving loans to help Greece, there remains concern that Greece may ultimately have to exit the eurozone due to its debt problems.

1. Vicente, Gillian Cristel

2. What is really the problem with Greece?
Years of…
1. Unrestrained spending
2. Cheap lending
3. Failure to implement effective financial reform
4. Failure to collect taxes
a.) citizens b.) officials
How big are these debts?
National debt, put at €300 billion ($413.6 billion), is bigger than the country's
economy, with some estimates predicting it will reach 120 % of GDP in
2010. The country's deficit –how much more it spends than it takes in –
is 12.7 %.

3. What will happen now?
Greece's CURRENT credit rating : rapidly goes…
–the assessment of its ability to repay its debts –has been downgraded to
the lowest in the euro zone. Meaning it will likely be viewed as a financial
black hole by foreign investors.
Will this hurt the rest of Europe?
Why?
1. Trust rates for the euro will substantially decrease.
2. Reputation of the euro will have a large scar.
3. Could lead to immediate fall against other currencies.

4. So, What is Greece doing about it?
HARSH SPENDING CUTS AND TAX HIKES!
Are the people happy?
Predictably…. They are not.
1. Burning of the national flag.
2. Warning of resistance from different sectors.
3. Threat of coups.

5. How are the Greece’s European neighbors helping?
The Euro zone have agreed a rescue plan for their ailing member. The
package, which would only be offered as a last resort, will involve
co-ordinated mutual loans from countries inside the common currency
area, as well as funds and technical assistance from the IMF.
According to the joined statement on the EU web:
a "majority" of the euro zone States would contribute an
amount based on their Gross Domestic Product (GDP) and
population, "in the event that Greece needed support after
failing to access funds in the financial markets."

6. “A European official familiar with the matter said on Saturday that the
reason for such a move—made as a condition of disbursing another
round of bailout aid—is "the insufficient progress on Greece's debt
reduction, which in part is the result of the country's extremely
decentralized budget process.“ – Germany Pushes for EU Budget Control
Over :Wall Street Journal. January 28, 2012
"Further progress was made, building on the understandings reached
yesterday on the key legal and technical issues. We are close to a
finalization of a voluntary [private-sector involvement]…. We expect to
conclude next week as discussions on other issues move forward,"
Charles Dallara and Jean Lemierre, co-chairmen of the institute's
steering committee, said in an emailed statement. The private-sector
creditors are being led in negotiations by the Washington-based
institute.” – Greece Creditors Close to Finalizing Debt Deal: Wall Street
Journal. January 28, 2012
“The odds that they will be gone from the euro within a few years are very
high.” –What happens if Greece leaves the euro? ; Reality Check with Polly
Curtis

7. Sarkozy said : “We cannot stop the Greek to commit suicide, it is better they
do it themselves than have Angela Merkel do it.” – Le Monde
Diplomatique
“After meeting Papandreou last night Merkel said in a common midnight
press conference with Sarkozy that the Greek prime minster’s
uncoordinated decision “has changed the psychological situation
massively”. A presidential advisor called Papandreou’s decision “totally
crazy”. -Greek Referendum to be held by 12.04. Eurointelligence, 03.11.11
“We respect Greek democracy and Greece’s right to decide on its own
future,” said Mr Barroso. “At the same time, we need Greece to
demonstrate commitment to the decisions that it has itself subscribed
to.” – Le Monde Diplomatique, The Telegraph: EU accused of Athens coup
after threat to end payments, by Bruno Waterfield in Brussels
“Banks shut their doors. Supermarket shelves empty. The rich stuff their
suitcases with dollars and head for the border. The middle classes
abandon their offices and join the street protests. The president flees by
helicopter from the roof of his palace.” –Eurozone crisis: how grim would
bankruptcy be for Greece?

8. http://www.greekcrisis.net/
http://www.dw-world.de/dw/article/0,,15513596,00.html
http://www.guardian.co.uk/business/2011/nov/06/euro-crisis-greece-bankruptcy-
argentina
http://www.guardian.co.uk/politics/reality-check-with-polly-
curtis/2011/nov/03/greece-bankruptcy-eurozone-exit
http://www.telegraph.co.uk/finance/financialcrisis/8871539/EU-accused-of-Athens-
coup-after-threat-to-end-payments.html
http://www.eurointelligence.com/eurointelligence-
news/news/singleview/article/greek-referendum-to-be-held-by-december-
4.html?L=&cHash=e50e2a9739ac19937841e73734411b70
http://edition.cnn.com/2010/BUSINESS/02/10/greek.debt.qanda/index.html
http://mondediplo.com/2011/12/03greece