Please provide a summary of the current economic crises exis

Please provide a summary of the current economic crises existing in Greece.

Include:

A Background of causal factors for the problems

B. Programs initiated by Greek Government to correct the problems

C. Reaction of Greek citizens

D. What effect Greece\'s problems are having on the rest of the EU?

Solution

Greece Debt Crisis:

The crisis in Greece started decades ago when when government increased the size of country\'s payroll. As a result every one in five Greek person ended up having a government job.

At one point of time, politicians stopped offering new job opportunities to citizens, rather started raising pay for the people already working for the government. This cupled with a poor tax collection regime, had greece scrambling to keep money flowing.

As a result, greece started borrowing from the foriegn countries, which was easier for it being a Europian union member. But at the same time, being a EU member, it was to require to adhere to strict financial restrictions which did not allow it to have a national budget deficit of more than 3% of the GDP.

Greece\'s debt increased but no one care because it continued to show a deficit of 3.4% for a long time. The final blow stuct with a formation of new government in the country which discovered that the budget deficit of 3.4% was a lie , but the debt has soared beyond 15% of the GDP. The relevation led the Greece\'s lenders to apply stricter rules of payback. the Greece\'s debt skyrocketed post it and it became impossible got it repay its loans without taking furthur loads.

IMF and EU came up to its support with the ailout program od 110 billion euro. The money was given with strict condtions of Greece takng austerity measues of lowering wages and proper tax collection. The second bailout was of 130 billion dollars, but experts say that greece will not be able to recover out of its debt before 2020.

Greece crisis might have an spillover effect on other Greece countries, which might punge the Euro down compared to other countries. Greece\'s exit from EU was was also at one point of time the point of discussion.