What did it to the economy?
As it was in good times for the rest of the world, hosting the Olympics - well, it threw them into a deeper funk. The economy has been in trouble for a long time now and who knows what would've happened if its European partners didn't hand out rescue loans to keep them afloat.
The country spent billions of dollars on different venues for the big event, but 6 years later.. what good are they now? A reported $1.2 billion dollars was used for security alone! A simpler way to put it - the Olympics ended up costing more than they had originally anticipated, was it worth the damage its done?
Although some would argue that the debt the country is in isn't all due to the 2004 event, it has definitely done a lot of damage. Perhaps if they put to use some of that land that isn't being used now to provide jobs to the unemployed, they wouldn't be criticized about overspending.
http://www.huffingtonpost.com/2010/06/03/greek-financial-crisis-olympics_n_598829.html
Monday, December 13, 2010
Greece & Paradox of Thrift
Paradox of Thrift? What does that mean.
When you get a bonus, what do you do with it? Save it? Spend it? If you save, good for you... but bad for the economy. It seems like a good idea, right? But if everyone were to start saving money during the economy's hard times, the result would be less consumption - which in turn we'd see a decrease in economic growth.
So where exactly does Greece stand when it comes to the paradox? Total debt to GDP for is at 124.1% based on GDP estimates for 2010 according to the International Monetary Fund (IMF). The economy is expected to shrink by at least 5% if they do implement the fiscal restraint, which in turn would decrease the amount of jobs available - increasing the unemployment, and a reduction in the aid available to the people who depend on government support.
What will happen next, only time will tell.. but as of late, the economy of Greece hasn't been up to par. Ideas are constantly thrown at them in how to fix the damage, but implementing them are easier said than done.
http://www.greenfaucet.com/economy/paradox-of-thrift-sovereign-style/83135
Wednesday, November 17, 2010
Greece & Inflation
Inflation is known as the measure of increasing consumer prices related to an increase in the volume of money, that results in the loss of the value of currency. We are given the chance to take a look at each country's growth and inflation, under the basis of its CPI and GDP deflator (most well known measures of inflation).
The above graph shows the average rate of inflation (per month) in Greece from 2008 to 2010. Taking a look at the graph, we can see that in July 2010, inflation hit a high of 5.5% in comparison to July 2009 when it was at a mere 0.6% - ultimately showing us how much inflation can rise or fall in as little as a year.
Greece was once considered a high inflation risk country, but by adopting the euro in 2002 they saw an increase in consumer spending which resulted in a boost in the economic growth.
Inflation Facts about Greece
The above graph shows the average rate of inflation (per month) in Greece from 2008 to 2010. Taking a look at the graph, we can see that in July 2010, inflation hit a high of 5.5% in comparison to July 2009 when it was at a mere 0.6% - ultimately showing us how much inflation can rise or fall in as little as a year.
Greece was once considered a high inflation risk country, but by adopting the euro in 2002 they saw an increase in consumer spending which resulted in a boost in the economic growth.
Inflation Facts about Greece
- Average inflation rate for the last 50 years is 9.7%
- Historical high was in January 1974, at 33.7%
- Record low was in February 1962, at -2.1%
Tuesday, September 28, 2010
Greece and its Economy
In recent news, the economy of Greece has been in the spotlight due to the Debt Crisis of 2010. In an article by Brian Milner, he states that:
One may ask how things got this bad. Let's take it back to 2002, when they adopted the euro as its currency. The country began living beyond its means and saw an increase in consumer spending, ultimately when the country started spending more than it had. They did however, see a boost in economic growth.
From 1997-2007, GDP growth in Greece averaged at 4% which was almost twice the European Union average. The country saw growth drop to 2.9% in 2008, and in the following year was struck by recession and saw growth drop again to 2.5%. That didn't stop this country. With the failure to address the growing budget deficit from 2001-2006, Greece violated the EU's Growth and Stability Pact that stated the budget deficit criteria be no more than 3% of GDP. It achieved the criteria from 2007-2008, but in 2009 was hit again and exceeded it by 12.7%.
The government is still under intense pressure by the EU and international lenders implement programs that include cutting government spending (13.6% of GDP in 2009), controlling public debt (115.1% of GDP in 2009), and changing the labor and pension systems. In 2009, the EU placed Greece under the Excessive Deficit Procedure, asking Greece to bring its deficit back to 3% by 2012.
Overall, Greece is the 27th largest economy in the world (by nominal GDP), 33rd largest (by purchasing power parity), and 25th highest by GDP per capita. What exactly makes up this country's GDP? 40% of it comes from the public sector, 15% from tourism, and 3.3% comes from being a major beneficiary of EU aid.
The problem started long before the current situation. Greece has been living beyond its means for a long, long time. In fact, from the time it joined the euro zone, its deficits have been higher than 7 per cent, which is more than double what they're supposed to be to belong to the euro. Greece has structural problems within its economy that it never really resolved. It's a very small economy with a very large public sector which accounts for about 40 per cent of its GDP. It was deficit spending all along and the 2004 Olympics made things even worse.
Read the full article hereThe Olympics made things worst? Well, during 2003 and 2007, the economy did grow by almost 4% partly because of infrastructural spending related to the 2004 Olympic games.
One may ask how things got this bad. Let's take it back to 2002, when they adopted the euro as its currency. The country began living beyond its means and saw an increase in consumer spending, ultimately when the country started spending more than it had. They did however, see a boost in economic growth.
From 1997-2007, GDP growth in Greece averaged at 4% which was almost twice the European Union average. The country saw growth drop to 2.9% in 2008, and in the following year was struck by recession and saw growth drop again to 2.5%. That didn't stop this country. With the failure to address the growing budget deficit from 2001-2006, Greece violated the EU's Growth and Stability Pact that stated the budget deficit criteria be no more than 3% of GDP. It achieved the criteria from 2007-2008, but in 2009 was hit again and exceeded it by 12.7%.
The government is still under intense pressure by the EU and international lenders implement programs that include cutting government spending (13.6% of GDP in 2009), controlling public debt (115.1% of GDP in 2009), and changing the labor and pension systems. In 2009, the EU placed Greece under the Excessive Deficit Procedure, asking Greece to bring its deficit back to 3% by 2012.
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| Comparison of GDP of Greece compared to Euro zone is displayed in the graph http://en.wikipedia.org/wiki/File:GreeceEconomyGDPEnglish.png |
Sources used: http://en.wikipedia.org/wiki/Economy_of_Greece
Monday, September 27, 2010
Greece
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| http://www.wallpaperbase.com/wallpapers/photography/greece/greece_6.jpg |
Have you ever seen a place that you just absolutely wanted to go too? So you sit there and think to yourself, "one day.. I will make it there?" For many people, Greece is that place. Whether it's to see the beautiful landmarks and the view, or the individual is intrigued by the history of this country the thought of "I will make it there" becomes a reality at one point or another.
Greece is located in Southern Europe, between Albania and Turkey. It borders the Aegean Sea, Ionian Sea, and the Mediterranean Sea. It is made up mostly of mountains which extend into the sea as peninsula. Their winters are wet, and the summers are hot and dry.
History of Greece
Greece was ran under the Ottoman's rule until the early 19th century. In 1821, the Greeks rebelled and declared their independence from the Ottoman Empire, but didn't achieve it until 1829. It was then that the Russian minister for foreign affairs, who was a Greek himself, returned home and became President of the New Republic.
In the 19th and early 20th century, Greece looked to enlarge its boundaries to include the ethnic Greek population of the Ottoman Empire. In 1947, Greece reached its present configuration, gaining the Ionian Islands (which were returned by Britain), Thessaly, Epirus, Macedonia, Crete and the Aegean Islands.
After siding with the Triple Entente (Great Britain, French Third Republic, and Russia) during World War I, the Great Powers awarded parts of Asia Minor to Greece. But the Turkish nationalists, overthrew the Ottoman government which ultimately defeated the Greek troops forcing over one million native Greeks of Turkey to leave and return back to Greece.
During World War II, Greece sided with the Allies and refused to give into Italian demands. It was in 1940 that Italy invaded Greece, and despite how small and limited their equipment was, they did not give up. After a bitter struggle in the Greco-Italian War, the first Allied victory was marked. It was in 1941-44 that Adolf Hitler stepped in and launched the Battle of Greece, where troops from Germany, Bulgaria, and Italy invaded Greece and overcame Greek, British, Australian, and New Zealand units. A civil war between supporters of the king and Communists arose, as a result Greece joined NATO in 1952, while relationships with its Communist northern neighbours became strained.
After the war, Greece developed rapidly. New attention was given to the women's rights, and suffrage for women was guaranteed in the Constitution in 1952. In 1967, the Greek military seized power,established a military dictatorship, and forced the King to flee the country. In 1975, a democratic republican constitution came into force after the Greek forces withdrew from the integrated structure of NATO. Five years later in 1980, Greece rejoined Nato. A year later, Greece joined the European Union and adopted the euro as its currency in 2001. With new infrastructure, funds from the EU and growing revenues from tourism, shipping, services, light industry and the telecommunications industry, the Greeks saw a new light to their standard of living, one that they had never seen before.
To this day, tensions continue to exist between Greece and Turkey over Cyprus, but after experiencing successive earthquakes, the Greeks and Turks have sympathized with one another causing the tension to settle a bit.
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