Professional Documents
Culture Documents
GREECE
HISTORY OF GREECE
Ancient Greece was a civilization belonging to a period of Greek history that lasted from the Archaic period of the 8th to 6th centuries BC to the end of antiquity. Immediately following this period was the beginning of the Early Middle Ages and the Byzantine era. Greek culture, especially philosophy, had a powerful influence on the Roman Empire, which carried a version of it to many parts of the Mediterranean region and Europe, for which reason Classical Greece is generally considered to be the seminal culture which provided the foundation of modern Western culture.
1833-1911 1826 1843 Greek Miracle 1860 1893 Maastricht Treaty GDP growth %3,2 %12,3 devaluation of Drachma
1980s;
%1,7
In 2004, Eurostat revealed that the statistics for the budget deficit had been under-reported so Greece entered the Eurozone through "falsified" deficit numbers. A currency swap arranged with Goldman Sachs allowed Greece to hide $1 billion of debt, however, this affected deficit values after 2001 (when Greece had already been admitted into the Eurozone) and is not related to Greeces Eurozone entry.
SHADOW ECONOMY The Size and Development of the Greek Shadow Economy and the Average one of 21 OECD countries over 1990 to 2010
TAXES
Weak tax collection forms a big part of Greeces fiscal problem. In June 2011, the Ministry of Finance reported that tax arrears amounted to 41 bn. Of that number, 90% came from 6,500 people and from 8,200 corporations that owe over 150,000 each.
Variable Year Germany Greece OECD - Total TAX REVENUE AS A PERGENTAGE OF GDP 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 34,8 36,0 36,9 36,9 37,1 37,2 36,5 36,2 36,5 37,3 37,5 36,3 35,6 35,8 35,0 35,0 35,6 36,0 36,4 26,2 26,3 27,1 27,6 27,9 28,9 35,9 30,3 32,0 32,9 34,0 32,9 33,6 32,0 31,2 31,9 31,2 31,8 31,5 33,1 33,6 33,8 34,3 34,2 34,6 35,0 34,9 34,9 35,2 35,3 34,8 34,5 34,5 34,4 35,0 35,1 35,2 34,6
EXPENDITURE
10
UNEMPLOYEMENT
Year 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 Unemployment 2,7 3,9 5,6 7,6 7,9 7,6 7,1 7,1 7,4 7,2 6,8 7,4 8,4 9,3 9,3 9,1 9,8 9,8 11,2 12,1 11,4 10,8 10,3 9,7 10,5 9,9 8,9 8,3 rate
11
UNEMPLOYEMENT
Long-term unemployment among young people: the risk of social exclusion
12
BRAIN DRAIN
Although there are no statistics for the numbers leaving the country, research from 2010 suggests that nearly 85% of Greeks studying abroad were not planning to return.
13
IMPORT EXPORT
14
PRODUCTION
The economy of Greece mainly revolves around the service sector (85.0%) and industry (12.0%), while agriculture makes up 3.0% of the national economic output. Important Greek industries are tourism and merchant shipping, while the country is also a considerable agricultural producer (including fisheries) within the union. As the largest economy in the Balkans, Greece is also an important regional investor.
15
CURRENT ACCOUNT
Greek industry is suffering from declining international competitiveness. The high relative wages and low productivity as a primary factor. The wages in Greece have increased at a five percent annual rate since the country adopted the Euro, about double the average rate in the Euro zone as a whole.
16
REVENUE - INCOME
When analysts discuss how the Greek economy may grow, there is an inevitable emphasis on tourism. But tourism has been in steep decline in the last decade. In 2000, Greeces tourism revenue was 10 bn (based on customs data). Ten years later, it had fallen to 9.6 bn, a 4.5% drop. But if we factor in inflation, revenues from tourism have dropped 28% since 2000, reflecting the structural flaws in Greece s tourism industry, which relate, getting more tourists who spend less money.
17
REVENUE - INCOME
Shipping is Greeces other major export. In 2000, Greece s revenues from shipping netted 4.6 billion. By 2010, that number had fallen to 4.5 bn. Adding inflation means that the drop has amounted to 27%, although some years were better than others. The main problem is that from a trade perspective, shipping affects both sides of the equation due to money spent to buy ships and on shipping related services. When we take out the outflow of money, the net effect for Greece has been declining.
ENTRANCE OF THE EU & PASSING
18
DEBT
Debt fuelled consumption creating imbalances between tradable and non tradable sector
19
20
To keep within the monetary union guidelines, the government of Greece had also for many years misreported the country's official economic statistics.At the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001, for arranging transactions that hid the actual level of borrowing. The purpose of these deals made by several successive Greek governments, was to enable them to continue spending, while hiding the actual deficit from the EU. The revised statistics revealed that Greece at all years from 2000-2010 had exceeded the Euros stability criteria, with the yearly deficits exceeding the recommended maximum limit at 3.0% of GDP, and also the debt level clearly exceeding the recommended limit at 60% of GDP.
ENTRANCE OF THE EU & PASSING
DEFICIT
21
22
GROWTH- CURRENCY
After Greece entered the Eurozone, Greece suddenly found itself with a solid, reliable currency. Its government and businesses could borrow at lower interest rates than before. The country boomed, with real GDP growth topping 3.8% for eight straight years. The reality was more complicated. Greece now had a solid currency but it wasn't Greece's currency. The euro was managed by the European Central Bank. The country kept running big deficits in the boom years.
ENTRANCE OF THE EU & PASSING
23
24
ECONOMICAL GROWTH
After 14 consecutive years of economic growth, Greece went into recession in 2008
Crisis
25
Crisis
26
High possibility of the sovereign default between 2011-2017: investors required higher interest rates for new money.
Crisis
27
External Causes: No signal from Eurozone governments about their support : Maastricht Treaty EU is a monetary union not an economic one with a Federal Budget: monetary policy but not any economic policy as supranational. Greece and Greeces major trading partners in the Balkan Peninsula were also hit by the 2007 global crisis which was originating from the US sub-prime loan market crisis.
Crisis
28
On government expenditures side; A 10% cut in general government expenditure on salary allowances - expected to save 0.65bn, 0.3% of GDP; A recruitment freeze in the public sector for 2010 to save 0.15bn, 0.1% of GDP; Implementation of a 5:1 retirement/ recruitment ratio for public sector employees from 2011 onwards. Termination of many short-term contracts in the public sector, to cut operating expenditures for ministries 10% -estimated to save 0.12bn, and to result in a cut of 7k-8k teachers on short-term contracts; Reduction in the budget item linked to social security and pension funds by 10% -to save 0.54bn, 0.2% of GDP;
Crisis
29
Crisis
30
The main features of this rescue plan on the revenue side were: Value-added tax bands to be raised - by 4.5-5.0% for the lowest, 9-10% for the medium band and 19-21% for the standard band. Higher VAT rates are estimated to result in 1.3bn of new revenues (0.55% of GDP); A substantial increase in indirect taxes of gasoline, tobacco and alcohol along with higher electricity charge; An increase of property taxes, taxes on luxury goods an on offshore companies and real estate. On government expenses: Further reductions on total salary payments to employees of the public sector; A freeze on state pensions Public sector works to be cut 5% (to save 0.5bn) and education spending to be cut 0.2bn.
Crisis
31
Crisis
32
33
Crisis
34
BAILOUT
In May 2010, the European Union and IMF provided 110bn euros of bailout loans to Greece to help the government pay its creditors. It soon became apparent that this would not be enough, so a second, 130bn-euro bailout was agreed earlier (February) this year.
Crisis
35
The measures to further reduce the expenses have been again very drastic. Thus ;
The 13th and 14th annual salary installments will be abolished for civil servants earning a gross salary in excess of 3,000/month; The Public Investment Budget (PIB) for 2010 will be reduced by 0.5bn (or 0.2% of GDP); A 3-year freeze in wages and pensions Further cut backs in central government operational cost
Crisis
36
Crisis
37
Crisis
38
Crisis
39
40
In July 2011, European leaders announced a second financial assistance package for Greece totaling 109 billion ($157 billion) with lower interest rate and longer maturities than the first package. European leaders announced, EFSF, instead of just providing loans, it will be able to provide precautionary lines of credit to countries under market pressures. European leaders and the Institute for International Finance (IIF), announced that holders of Greek bonds would contribute 50 billion through 2014 to the crisis response. Specifically, they would participate, on a voluntary basis, in bond exchanges and bond rollovers (37 billion, about $53 billion) and debt buybacks (12.6 billion, about $18 billion) to lower Greek debt payments over the short-term.
Crisis
41
Crisis
42
Crisis
43
TODAY
ELECTIONS
The main two parties were going head to head according to the first poll, which were held on 6th of May. And with the results of the elections on 17th of June the New Democracy party won the elections and the party leader Antonis Samaras becomes the prime minister of Greece. The closest rival was Syriza. The two main political distinctions between two parties were the attitude against the current crises Greece was going through.
44
NEW GOVERNMENT
While New Democracy and its leader Antonis Samaras were supporting the bailout plan and austerity measures of the IMF and EU, Syriza and its leader Alexis Tsiparis was against the current IMF austerity plan and he was planning to exit from the Eurozone and take the currency back to drachma.
Today
45
AUSTERITY MEASURES
Fiscal Adjustment - The Greek Government are expected to implement reductions in health spending, defense spending, public investment, public sector wage reductions and pensions cut
Today
46
AUSTERITY MEASURES
Bank Recapitalizations - All banks will be required to achieve a core tier-1 capital ratio of 9 percent by the third quarter of 2012 and of 10 percent in the second quarter of 2013, by raising capital themselves and/or receiving bailout funds. - Depending on the degree of state help they will need, banks will receive state funds in exchange for common voting shares, shares with restricted voting rights or convertible bonds.
Today
47
AUSTERITY MEASURES
Privatizations -Cumulative privatization receipts since June 2011 should be at least 4.5 billion euros by end-2012, 7.5 billion by end-2013, 12.2 billion by end-2014 and 15 billion by end-2015. An initial privatization target of 50 billion euros should be achieved "over the medium term. -The list of companies whose full or partial privatization will be launched in 2012 includes gas company DEPA, gas grid operator DESFA and refiner Hellenic Petroleum.
Today
48
AUSTERITY MEASURES
Labor Reform - Greece must pass legislation to reduce the monthly minimum wage, currently at about 750 euros gross, by 22 percent. Below the age of 25, it will be cut by 32 percent. - Social security contributions are to be reduced by 5 percent. - One civil servant will be hired for every five retiring, with the aim of cutting the state sector workforce by about 150,000 people by 2015.
Today
49
50
1. the government deficit; 2. the countrys balance of payments deficit, and 3. the government debt.
51
52
54
55
() . ,
56