Professional Documents
Culture Documents
GROUP 1
Greece has the worst combination of high debt level, large
budget deficit and large external debt.
• A country with a population of 11.2 million and a GDP of US$ 360 billion, representing 2.7 %
of the Eurozone and 27th biggest economy in the world.
• Has one of the highest debt GDP ratios in the world : 113% of GDP.
• Has one of the highest budget deficits in the world : 12.9% of GDP.
• If Greece were to default on its debt it would account to the biggest sovereign default in
history.
WHY HAS GREECE GARNERED SO MUCH
ATTENTION LATELY
• Since it has joined the Eurozone it has ceded control of the monetary policy and can
no longer print money.
• Wages have risen faster than in Germany and it has not adapted its economy rapidly
enough to the Global competiton specially Asia.
• Two of its largest industries, maritime shipping and tourism were strongly affected by
the global economic downturn.
GREECE’S TROUBLES
• Greeces debt woes came to light late in 2009 when a new government
took office and revealed that the country had been overspending.
• It was also under-reporting its debt, which had balooned to 12.7 % of
the GDP. Four times the limit allowed by the European.
• Several credit ratings agencies have downgraded Greece’s credit
rating. These actions has fostered potential fear among investors in
Greek Bonds, making it very difficult for the country to borrow money
to fund its debts.
• If Greece were to default on its debt, banks in Greece as well as other
countries holding Greek bonds would suffer very badly.
DANGER OF DEFAULT