EU Financial Crisis in Greece

      In 2001, Greece joined the euro. Eight years later, in the winter of December 2009, Greece acknowledged that they were in for a long economic crisis because its debts have reached 300bn euros. Public spending reached unbelievable numbers that has caused a huge budget deficit, difference between spending and income, that increased drastically. 

     The Economic crisis can be traced back to as early as the USA sub prime crisis in 2007. A regime shift in economic policy in 2009, worsened the Greek financial crisis, and made Greek economic fundamentals "inconsistent" with the rest of the European Union's economic goals, and thus severed Greece from the EMU. In lame man's terms, the old government said that the gross domestic product was 12.7%, versus the 6.0% the old government had reported, and the 3.7% increase that the new regime promised in 2009. 

     Constant help through bailout loans from the EU and IMF have eased the crisis but not enough to terminate the ongoing recession.Why does this effect you, you might ask? Germany, and the rest of Europe all have investments tied close to Greece. They need to halt the spread of the financial crisis to other countries, such as Italy, Spain, and Ireland. A domino effect could occur, where once these countries start defaulting, so will the rest of Europe who have investments tied to them. 

Here is a short video clip introducing the crisis in Greece and how this affects everyone globally. 

Works Cited

1. Arghyrou, M. G., & Tsoukalas, J. D. (n.d.). The Greek Debt Crisis: Likely Causes, Mechanics and Outcomes - Arghyrou - 2011 - The World Economy - Wiley Online Library. Wiley Online Library. Retrieved September 4, 2013, from http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9701. 2011.01328.x/full

2. Buiter, W. H., & Rahbari, E. (2010, July 9). Greece and the fiscal crisis in the EMU.http://www.willembuiter. com/Greece.pdf. Retrieved September 4, 2013, from http://www.willembuiter.com/ Greece.pdf