Sei sulla pagina 1di 16

Quick Facts

Full Name

Hellenic Republic

Population

10,775,642 (July 2015)

Capital

Athens

Largest City

Athens

Official Language

Greek

Major Religion

Eastern Orthodox Christianity (official)

Life Expectancy

Male: 77.38, Female: 83.82

Monetary Unit

Euro

Government

Unitary parliamentary constitutional republic

President

Prokopis Pavlopoulos

Prime Minister

Alexis Tsipras

GDP (PPP)

$294 billion (2015)

Per Capita

$26,773

Gini (2014)

34.5

Greek History in Brief

Historical Timeline of international


Dominant currencies.

Greek civilization began around 3000BC, with the Minoans, who were followed by Myceneans, who lasted till 1100 BC.
After this, A ie t Gree e e tered a Dark Age that lasted u til 800 BC, he Greeks ega to e plore sea.
Arou d 480 BC, a golde age ega that a e to e k o as Classi Gree e, hi h is he it ear ed the a e the irthpla e of western
i ilizatio .
In 146 BC, Roman conquered the Greek Empire.
Around 300 AD Greece became part of Byzantine Empire.
Early 16th Century came under Ottoman Turk rule.
Gained independence from Turks in 1830.
In WWI fought on the side of allies but communism and fascism was quite prevalent.
Greece was occupied by Nazis in WWII
Communism was defeated in Greece 1949 and 1952 Greece joined Nato
For a short period military dictatorship took over but ended in 1974 with democratic elections creating parliamentary republic
Greece joined European Union in 1981

Current Issue

What is Sovereign Debt Crisis?


A sovereign debt crisis is generally defined as economic and financial problems caused by the (perceived) inability of a
country to pay its public debt. This usually happens when a country reaches critical high debt levels and suffers from
(perceived) low economic growth which results in loan defaults and rescheduling of loans or bailout packages from other
countries or international bodies.
Debt to GDP (2014) : 177.10 %
As of 09-Aug-2015

Timeline of Events
Earthquake hits Athens on
Sept 7 with a magnitude of 6.0
Los of $3 billion

1999

Badly affected by the


late 2000s financial crisis

2000

2001
Reports revealing the falsifying
of reports by understating
the deficit figures.
Deficit was rest to 113% of GDP

George Panpandreou
resgins as PM

2011

Greece joined Euro Zone

Hosted the Olympics and along


with the decade long debt borrowed
additional $15 billion from Eurozone banks

2010

2009

Failed bailouts. IMF and


Gree es redit
ECB issued the initial
rating was downgraded.
bailout worth $264 million,
which was used to pay the unpaid debt.

2004
Global Recession and credit
availability became a
major concern.

2008

Prior to 1999
Budget Deficit (Actual)

Up until 1994, Greece recorded


very high deficits, for some years
above 10% of GDP.

1997: 6.44%
1998 : 4.13%
1999 : 3.38%

During the late nineties, according


to the figures submitted by the
Greek government to the
European Union, Greece's high
budget deficits were significantly
lowered

Availability of Credit was a major


concern for Greece and all the
credit available was at a relatively
higher rate of interest.

Triggers

Greece
Entering
Euro Zone

Debt to
GDP Ratio

Govt.
Borro i gs
and
spe di gs

Tax
Collection
Issues

Greece Entering Euro Zone


Greece had immediate
access to high amount of
cheap credit
Debt

Gree e e ide tl ooked its


books to show it had deficit
< 3% of GDP in order to be
eligible to join Euro Zone

22%
44%
12%
19%

EPSF

Eurozone

Private Investors

Banks

Misalignment of Monetary
Policy (set by ECB) and Fiscal
Policy (set by the Greek
Govt.)

Debt to GDP Ratio


Money in Billion

200

Debt to GDP trend

171.3
146

150

175 177.1
156.9

129.7
100

106.1 105.4 112.9

100
50
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year

Generally, Government debt as a percent of GDP is used by


investors to measure a country ability to make future
payments on its debt, thus affecting the country borrowing
costs and government bond yields.
Due to easy availability of cheap credit, Greece was taking
more and more debt in order to pay its previous debt.

Go er

e t Borro i gs/Spe di gs
65

Govt. Spending as % of GDP


60.1

60
54

55

54

54.4

2012

2013

52.2
50.6

50
46.9
45

44.6

44.9

2006

2007

40

Helped by its decision to join the euro in 2001, Athens kept on


spending. The new currency kept borrowing costs down and made it
easy to secure funds from commercial banks at rock-bottom interest
rates, increasing its dependence on cheap loans to fill the spending
gap.
Public sector wages doubled and departmental spending soared.
Already high defence costs continued to soar, propelled by years of
antagonism with its neighbour Turkey.
Athens was poorly prepared for the 2008 crash - living off easy credit,
while spending on wages and defence soared, and taxes began to fall
away

2008

2009

2010

2011

2014

Defence Spending as % of GDP


3.5
3

3.2

3
2.7

2.6

2.4

2.5
2

1.7

1.7

1.8

2007

2008

2009

2.3

2.2

2.2

1.7

1.6

1.5

1.5

1.5

2010

2011

2012

2013

2014

1.5
1

0.5
0
Greece

NATO - Europe

Tax Collection Issues


1/3 of Greeks are
self employed

High income to debt


ratio

Income 1.92X of
what is reported

Potentially 10B 30B


Euro uncollected

Unemployment
55% (15-28 age)

Tax Evasion: Ratio of Debt Payment/Income being > 1

Current Scenario
After 6 ears of re essio , Gree es e o o
expanded by 0.8% in 2014 and is projected to expand
by 1.6% in 2015.
Unemployment Rate: 26%
Youth Unemployment Rate: 51%
Debt to Equity: 174.9%
Consumer Confidence: -30%
Current Credit Rating:

Moodys

S&P
CCC+

Stable

Caa3

Fitch
rur

CC

stable

Platform:
End Austerity
Renegotiate Euro bailout
plan
Retain dignity to all
Greek people

In Feb 2015 the radical left Syrizia part won the General
Election, Alexis Tsipras being the new leader.
Gree e Leaves ehi d atastrophi austerity, it leaves
behind fear and authoritarianism, it leaves behind 5 years
of hu iliatio a d sufferi g.

Uncertainty
What EU wants?
Continue Austerity
Save and Growth Pact
A govt. debt to
GDP ratio of 60%
or below
A max deficit of
3% or less of GDP

Referendum Results

What Greece Wants?


End Austerity

Latest Update
After a 17-hour summit, Europe's leaders have reached a deal. If the Greek parliament passes a package of reforms by
Wednesday night, the country's creditors will move forward with a third bailout on terms that are much stricter than previous
proposals. If the deal proceeds, it will avert the immediate chaos that Greece's uncontrolled exit from the euro area would entail,
and enable European leaders to talk about something else for a while.
The Greek parliament passed sweeping austerity measures demanded by lenders to open talks on a new multibillion-euro
bailout package to keep Greece in the euro, but dozens of hardliners in the ruling Syriza party deserted Prime Minister Alexis
Tsipras. The package was approved with 229 votes in the 300-seat chamber. There were 64 votes against it and six abstentions.
Greece is on track to complete a draft deal on a third bailout by Tuesday and possibly get a first disbursement by Aug. 20 to
meet a key payment, sources familiar with a conference call of senior EU finance officials late on Friday said. Athens is
negotiating with European Union institutions and the International Monetary Fund for up to 86 billion euros ($94 billion) in fresh
loans to stave off economic collapse and stay in the euro zone.

Potrebbero piacerti anche