as an anti-austerity party takes power
in Greece a serious confrontation looms
between the new government and its
eurozone creditors throwing into
question the stability of this troubled
economic union welcome to watchmojo.com
–nt we’re counting down 10 crucial
facts you should know about the Greek
debt crisis number 10
when did the crisis begin the United
States entered into a recession in 2007
after the collapse of its subprime
mortgage industry which prompted a
worldwide economic downturn known as the
Great Recession securities backed by
these subprime mortgages had been traded
worldwide and infected markets globally
European governments were forced to bail
out their banking systems which held a
lot of these assets on their books these
bailouts combined with existing high
levels of government debt throughout
Europe sparked doubt among investors as
to whether European governments could
successfully refinance their debt loads
which ultimately led to the European
sovereign debt crisis data for France
showed the PMI they’re recording its
biggest fall since the index began 14
years ago by 2009 it had become clear
that some eurozone countries would
require assistance from external
institutions in order to manage their
debt and one of these nations was Greece
number 9 what were the underlying causes
of the crisis since the mid 70s the
Greek government had been running a
deficit funded by issuing government
bonds the introduction of the European
common currency the euro in 1999 created
a situation in which all European bonds
were considered the same meaning Greece
would pay significantly less interest on
the bonds at issue this encouraged
Greece to continue disastrously
excessive deficit spending with the
country’s government even making
arrangements with financial institutions
like Goldman Sachs to conceal their true
level of borrowing at the same time the
Greek government consistent
failed to collect all of the taxes that
were owed to them this combined with a
large public sector kept Greek
government spending high and pushed
Greeks debt to GDP ratio to 146 percent
by 2010 number eight how did the crisis
evolve the economic crisis in Greece was
exacerbated in April 2010 when the
credit rating agency Standard & Poor
downgraded Greece’s credit rating to
junk status meaning it was not worthy of
investment this effectively closed off
private capital markets to Greece as a
source for borrowing money international
financial service agencies like Standard
& Poor continuously monitor a country’s
creditworthiness which in turn
determines what interest rate a
country’s bonds should yield by June
2011 Greece’s credit rating had dropped
to triple C the lowest credit rating in
the world and the country’s interest
rates shot back up to pre Euro rates
Greece earned this Triple C rating due
to the belief that it might actually
default on its debt obligations
essentially meaning that the country
would declare bankruptcy number seven
what was the response to the crisis
facing the prospect of default by mid
2010 Greece entered into loan agreements
with a group of creditors consisting of
other eurozone countries the
International Monetary Fund and the
European Central Bank which was
nicknamed the troika the first loan
package was agreed to on May 2nd 2010 to
the tune of 110 billion euros due to
extreme circumstances the European Union
met in July 2011 to structure a second
loan package of 109 billion euros then
in October 2011 eurozone leaders and the
International Monetary Fund came to a
joint agreement with banks in order to
write off 50% of Greece’s debt over the
next nine years in a plan to reduce the
country’s debt to 120 percent of GDP by
2020 number six what were the conditions
of Greece’s loan
Greece was forced to implement severe
austerity measures in return for
receiving loans from the troika this
included significant spending cuts
public sector salary and pension cuts
and the privatization of national
industries these measures were met with
public resistance in the form of
widespread protests and a general
nationwide strike
so Madhavan party gallop student party
debate masked protesters clashed with
police on the streets of major cities
hurling petrol bombs with some
confrontations leading to several deaths
and hundreds of injuries in 2012 the IMF
admitted that they did not foresee the
overall impact of the austerity measures
which actually worsened the Greek
recession violent riots erupted in the
Greek capital of Athens throughout that
year number 5 what were the consequences
of austerity very sort of Lucien against
the government the austerity measures
held deep ramifications for Greece and
severe consequences for its citizens as
of February 2015
unemployment hovered around 26 percent
and for those under the age of 25 that
number pizzas high as 50 percent about a
third of the population had by that
point sunk below the poverty line Greece
had the highest child poverty rate in
Europe with nearly forty point five
percent of children trapped in
impoverished circumstances furthermore a
study found that after every new round
of austerity measures wasn’t forced
suicide rates in men and women increased
by 12% to 36% and remained high the
conditions that the troika requested in
return for bailing out the Greek economy
were so harsh that it prompted one
United Nations official to speculate
that they constituted human rights
violations number four
how has the crisis affected Europe
Greece was set to receive a final batch
of funding On February 28 2015 however
Greece’s recently elected left-wing
government had proclaimed its desire to
halt austerity and renegotiate the terms
of its debt even suggesting that a
round of debt Forgiveness would be
necessary German Chancellor Angela
Merkel signaled that more loans would
not be extended to Greece nor would any
more of its debt be forgiven by that
point it was likely that if an agreement
were not reached Greece would default on
its debt and exit the eurozone that
theoretical event would likely cause a
ripple effect that would see other
indebted countries choosing to leave
their debts and the euro zone behind
causing the complete breakdown of the
eurozone with dire economic consequences
for every European country number 3 who
is in charge now the problem is not just
clearly just just great its European
problem Greece is a part of the eurozone
and the problem of debt of Greece is a
part of over of a bigger european
problem on january 25th 2014 alexis
tsipras the leader of Greece’s leftist
political party the coalition of the
radical left or syriza as it’s commonly
known became the new prime minister of
greece cyprus was part of the Greek
Communist Youth Organization in the
1980s and in the 90s rose to political
prominence as a leader of the student
movement
soon after the new government was formed
discussions began between Greece’s new
finance minister Yanis varoufakis and
Europe’s financial officials bata
focused toward Europe drumming up
support for Cerises
anti austerity and debt negotiation
platform upon which they had campaigned
and won the support of the Greek
electorate vada Farkas managed to gain a
sympathetic ear from many in Europe most
notably the French but the Germans
remained steadfast in their refusal to
entertain his proposals number two what
is the new government’s vision the new
Greek finance minister devised a plan to
end the country’s austerity measures
while also cutting Greece’s debt Greece
would swap the outstanding debt for new
growth linked bonds this new plan came
in the wake of his previously stated
goal which was to spearhead a write-off
of Greece’s foreign debt this previous
plan was unacceptable to Germany and
other creditor countries due to the fact
that it implied a loss to taxpayers in
their countries but who focuses
overarching message
was that the original loans extended to
Greece were completely irrational to
begin with his argument was that in 2010
Greece effectively became insolvent and
the euro zone’s response was to extend
and pretend meaning they extended more
loans to the country while pretending
that there was a realistic possibility
that they could be repaid number one how
will the Greek people move forward but a
focus a former economics professor at
the University of Athens chose to play
hardball with the European Union making
drastic proposals that he knew would
attract a lot of media attention his
strategy was considered risky and it
remains unclear if it will be effective
the Greek government will not negotiate
with the troika only with official
partners there was widespread
recognition among economists that there
was no real possibility of Greece ever
repaying its entire debt in order to
keep the eurozone intact the European
Union will likely reach a compromise
that would involve extending the
February deadline while also extending
the period when Greece’s debt repayments
would be due and offering a lower or
even 0% interest rate cereza for their
part will likely try to stay true to
their vision of social justice providing
aid to those Greeks hit hardest by
austerity measures did these facts
surprise you to vote for which news
story is covered next
head over to watchmojo.com slash suggest
and be sure to hit that subscribe button
for more newsworthy top 10s published
every week
you
in Greece a serious confrontation looms
between the new government and its
eurozone creditors throwing into
question the stability of this troubled
economic union welcome to watchmojo.com
–nt we’re counting down 10 crucial
facts you should know about the Greek
debt crisis number 10
when did the crisis begin the United
States entered into a recession in 2007
after the collapse of its subprime
mortgage industry which prompted a
worldwide economic downturn known as the
Great Recession securities backed by
these subprime mortgages had been traded
worldwide and infected markets globally
European governments were forced to bail
out their banking systems which held a
lot of these assets on their books these
bailouts combined with existing high
levels of government debt throughout
Europe sparked doubt among investors as
to whether European governments could
successfully refinance their debt loads
which ultimately led to the European
sovereign debt crisis data for France
showed the PMI they’re recording its
biggest fall since the index began 14
years ago by 2009 it had become clear
that some eurozone countries would
require assistance from external
institutions in order to manage their
debt and one of these nations was Greece
number 9 what were the underlying causes
of the crisis since the mid 70s the
Greek government had been running a
deficit funded by issuing government
bonds the introduction of the European
common currency the euro in 1999 created
a situation in which all European bonds
were considered the same meaning Greece
would pay significantly less interest on
the bonds at issue this encouraged
Greece to continue disastrously
excessive deficit spending with the
country’s government even making
arrangements with financial institutions
like Goldman Sachs to conceal their true
level of borrowing at the same time the
Greek government consistent
failed to collect all of the taxes that
were owed to them this combined with a
large public sector kept Greek
government spending high and pushed
Greeks debt to GDP ratio to 146 percent
by 2010 number eight how did the crisis
evolve the economic crisis in Greece was
exacerbated in April 2010 when the
credit rating agency Standard & Poor
downgraded Greece’s credit rating to
junk status meaning it was not worthy of
investment this effectively closed off
private capital markets to Greece as a
source for borrowing money international
financial service agencies like Standard
& Poor continuously monitor a country’s
creditworthiness which in turn
determines what interest rate a
country’s bonds should yield by June
2011 Greece’s credit rating had dropped
to triple C the lowest credit rating in
the world and the country’s interest
rates shot back up to pre Euro rates
Greece earned this Triple C rating due
to the belief that it might actually
default on its debt obligations
essentially meaning that the country
would declare bankruptcy number seven
what was the response to the crisis
facing the prospect of default by mid
2010 Greece entered into loan agreements
with a group of creditors consisting of
other eurozone countries the
International Monetary Fund and the
European Central Bank which was
nicknamed the troika the first loan
package was agreed to on May 2nd 2010 to
the tune of 110 billion euros due to
extreme circumstances the European Union
met in July 2011 to structure a second
loan package of 109 billion euros then
in October 2011 eurozone leaders and the
International Monetary Fund came to a
joint agreement with banks in order to
write off 50% of Greece’s debt over the
next nine years in a plan to reduce the
country’s debt to 120 percent of GDP by
2020 number six what were the conditions
of Greece’s loan
Greece was forced to implement severe
austerity measures in return for
receiving loans from the troika this
included significant spending cuts
public sector salary and pension cuts
and the privatization of national
industries these measures were met with
public resistance in the form of
widespread protests and a general
nationwide strike
so Madhavan party gallop student party
debate masked protesters clashed with
police on the streets of major cities
hurling petrol bombs with some
confrontations leading to several deaths
and hundreds of injuries in 2012 the IMF
admitted that they did not foresee the
overall impact of the austerity measures
which actually worsened the Greek
recession violent riots erupted in the
Greek capital of Athens throughout that
year number 5 what were the consequences
of austerity very sort of Lucien against
the government the austerity measures
held deep ramifications for Greece and
severe consequences for its citizens as
of February 2015
unemployment hovered around 26 percent
and for those under the age of 25 that
number pizzas high as 50 percent about a
third of the population had by that
point sunk below the poverty line Greece
had the highest child poverty rate in
Europe with nearly forty point five
percent of children trapped in
impoverished circumstances furthermore a
study found that after every new round
of austerity measures wasn’t forced
suicide rates in men and women increased
by 12% to 36% and remained high the
conditions that the troika requested in
return for bailing out the Greek economy
were so harsh that it prompted one
United Nations official to speculate
that they constituted human rights
violations number four
how has the crisis affected Europe
Greece was set to receive a final batch
of funding On February 28 2015 however
Greece’s recently elected left-wing
government had proclaimed its desire to
halt austerity and renegotiate the terms
of its debt even suggesting that a
round of debt Forgiveness would be
necessary German Chancellor Angela
Merkel signaled that more loans would
not be extended to Greece nor would any
more of its debt be forgiven by that
point it was likely that if an agreement
were not reached Greece would default on
its debt and exit the eurozone that
theoretical event would likely cause a
ripple effect that would see other
indebted countries choosing to leave
their debts and the euro zone behind
causing the complete breakdown of the
eurozone with dire economic consequences
for every European country number 3 who
is in charge now the problem is not just
clearly just just great its European
problem Greece is a part of the eurozone
and the problem of debt of Greece is a
part of over of a bigger european
problem on january 25th 2014 alexis
tsipras the leader of Greece’s leftist
political party the coalition of the
radical left or syriza as it’s commonly
known became the new prime minister of
greece cyprus was part of the Greek
Communist Youth Organization in the
1980s and in the 90s rose to political
prominence as a leader of the student
movement
soon after the new government was formed
discussions began between Greece’s new
finance minister Yanis varoufakis and
Europe’s financial officials bata
focused toward Europe drumming up
support for Cerises
anti austerity and debt negotiation
platform upon which they had campaigned
and won the support of the Greek
electorate vada Farkas managed to gain a
sympathetic ear from many in Europe most
notably the French but the Germans
remained steadfast in their refusal to
entertain his proposals number two what
is the new government’s vision the new
Greek finance minister devised a plan to
end the country’s austerity measures
while also cutting Greece’s debt Greece
would swap the outstanding debt for new
growth linked bonds this new plan came
in the wake of his previously stated
goal which was to spearhead a write-off
of Greece’s foreign debt this previous
plan was unacceptable to Germany and
other creditor countries due to the fact
that it implied a loss to taxpayers in
their countries but who focuses
overarching message
was that the original loans extended to
Greece were completely irrational to
begin with his argument was that in 2010
Greece effectively became insolvent and
the euro zone’s response was to extend
and pretend meaning they extended more
loans to the country while pretending
that there was a realistic possibility
that they could be repaid number one how
will the Greek people move forward but a
focus a former economics professor at
the University of Athens chose to play
hardball with the European Union making
drastic proposals that he knew would
attract a lot of media attention his
strategy was considered risky and it
remains unclear if it will be effective
the Greek government will not negotiate
with the troika only with official
partners there was widespread
recognition among economists that there
was no real possibility of Greece ever
repaying its entire debt in order to
keep the eurozone intact the European
Union will likely reach a compromise
that would involve extending the
February deadline while also extending
the period when Greece’s debt repayments
would be due and offering a lower or
even 0% interest rate cereza for their
part will likely try to stay true to
their vision of social justice providing
aid to those Greeks hit hardest by
austerity measures did these facts
surprise you to vote for which news
story is covered next
head over to watchmojo.com slash suggest
and be sure to hit that subscribe button
for more newsworthy top 10s published
every week
you
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