Week 13: Greece's Economic Crisis Still Hurts
Greece’s Bailout Is Ending. The Pain Is Far From Over.
Summary: Greece has been in an economic crisis over the past decade, and it is finally over. During the crisis, a third of the population was in poverty, and the rest experienced pay-cuts. Most Greeks cannot even afford to pay for their rent or their electrical bills. On top of that, Greece relied on about $360 billion on bailouts to help them escape the crisis. Even though unemployment in Greece has decreased since the end of the crisis, it is still the highest in the eurozone.
This shows a day center in Athens. Day centers serve as places for homeless people, refugees, and troubled Greek families to do their laundry, shower, and seek medical aid.
Luckily, due to Greece’s variety of tourist destinations, such as islands and historical landmarks (like the acropolis), small businesses are beginning to thrive, and larger ones to rebound. There are also social aspects of the crisis that still linger after its end. For example, many people are left depressed, and suicide rates over the crisis had steeply risen. Although those rates have diminished, they are still much higher than what they used to be before the crisis. Debts caused by the crisis also led to many divorces and breaks in familial ties. At the moment, the crisis still prevents Greeks from much if any more than the bare minimum they need to survive.
The Parthenon (which is part of the acropolis in Athens) serves as one of the many tourist destinations in Greece that has provided economic support to the country, and has helped Greece to become more like how it was before the economic crisis.
Reaction: I feel bad for the people in Greece who are taking a heavy toll due to the debt crisis. It’s saddening to see so many people below the poverty line, and to imagine what life must be like over there. However, I am hopeful for the country as business begins to rise. The bailouts and aid from other countries helped the Greeks get back to a more normal state of life. The world should take this as an example of what human kindness is and to apply it to other impoverished countries.
Connection: This relates to the Weimar Republic that formed after World War I in Germany. They experienced an economic crisis after needing to pay off their war debts. Although the two crisis of each country arose from different issues, they both led to similar results. In both cases, many people fell below the poverty line, and in both cases, the issues continued after the crisis. Unsettlement and unhappiness due to low quality of life was experienced after both situations (and still is being experienced in Greece). For example, in the Weimar Republic, people burned their money due to inflation to get warmth. In the same sense, Greeks under the poverty line can not afford to pay their electrical bills, and thus live without electricity (and in the cold).
Questions to consider:
1) Do you think it is safe to say that Greece's economic crisis is over, considering the fact so many people are still barely able to live?
2) For any country in an economic crisis, when is increasing taxes too much, or when is it time to seek international economic support, such as Greece did with bailouts?
3) What are some methods Greece could use to gain income and restore a good quality of life?
Greece has still not escaped its economic crisis. Although they may be climbing out of the recession, too many of their citizens are not in a state of financial peace for me to consider the true crisis over. An article by the Greek Reporter written in October 2018 stated that more than one third of the Greek population was in poverty or in danger of poverty. I think that if it was not for Greece's popular tourist destinations, they would have an extremely difficult time gaining capital and trying to get out of the crisis. Although taxes are guaranteed in every society, there is a fine line between being a responsible government and hurting one's citizens financially. The government could also try to tax the more wealthy figures in its society more than the poorer citizens. If citizens go into debt when taxes are implemented in their budget, then I think that's a stopping point for the government.
ReplyDeleteSources: https://greece.greekreporter.com/2018/10/17/one-in-three-greeks-lives-in-danger-of-poverty-data-show/
https://www.cia.gov/library/publications/the-world-factbook/geos/print_gr.html
Greece’s economic crisis isn’t over yet because it still isn’t economically independent, as it still relies on international support through the form of bailouts. But, then again, the US is also in debt, and yet our country isn’t referred to as in an economic crisis. The difference is due to the citizen’s financial situation. According to ucdavis.edu, 12.3% of the US population is suffering in debt, whereas a staggering 33.3% of Greeks are living in poverty(https://poverty.ucdavis.edu/faq/what-current-poverty-rate-united-states ). It is time to seek international help when it becomes obvious that increasing taxes will no longer work to fix the economic crisis or depression. When a large quantity of citizens are put into debt due to the taxes, the government could raise taxes on the rich or they could use Hitler’s tactic to stop inflation: using dual currencies.
ReplyDeleteGreece’s economic troubles are not over. The GDP in Greece decreased every year from its all-time high in 2008 until 2016. Greece’s economy started struggling when it spiraled into the US caused economic recession starting in 2009. From 2009 to 2012, Greece’s credit rating decreased from a good investment to extremely speculative. In 2015 and 2016 Greece still had a negative GDP growth rate. While the world GDP grew over 2.5% every year from 2010 to 2017 Greece’s only increased in 2017, and even then it was less than half of the world increase rate. At this point Greece is still very dependent on the tourism sector and nearly 70% of their GDP is services. Even after decreasing their unemployment every year Greece still has a higher percentage of unemployed people than Sudan, Jordan, and Iraq. Greece is still in over 1.5 billion dollars of debt. While their economic statistics have improved consistently since the crisis in 2009, it is far from over. They still have a lot of debt and the economy is not fully healthy yet. Additionally, after their bankruptcy they have debts scheduled until 2060. The bailout was worth 320 billion dollars and they have only repaid 42 billion of that. On the topic of economic bailouts, they are absolutely necessary for countries. If Greece was not bailed out there would be 10 million people stranded without a country. However, bailouts in general are an interesting concept. When company bailouts are necessary it is clear there is not enough competition in the economy. Greece is lucky because they have the tourism to rely on while their economy is recovering. Right now they need to focus on repaying their debts and improving agriculture and other industries.
ReplyDeletehttps://docs.google.com/document/d/1205l8IBEg-eeJ0zuIEXT0dXltjEtksbOqyWEcHN6CWo/edit?usp=sharing
I do not think that Greece’s economic crisis is over. Even though the country is showing incredible growth - at a rate that surpasses both the EU and the US, it still does not mean that the quality of life is improving or that Greece is becoming any more economically responsible. The growth that has resulted so far is because the government fixed specific steps that went wrong after the financial crisis. This is also because it is easier to improve from a low point than a high point. This does not mean that Greece will keep growing at his rate, especially if major changes are not made. Some of these changes are policy reforms that have to do with debt. While international bailouts are better for the people, they put the country in a horrible position. Right now, government debt for Greece is at 180%. In monetary terms, Greece owes its lenders more than 250 billion euros. First the government should invest in infrastructure, which will provide jobs. Then, the government should create a program that provides some very basic necessities for their citizens, but taxes should go up slightly. This will put the country at a better level internationally while working towards a solution for its people. This is because it is more important for a country to stabilize before it risks a lot of money just trying to help it's people, which could possibly lead to more debt. I know the conditions are already very bad, but by stabilizing, the government will be able to work more efficiently over the long run.
ReplyDeletehttps://www.washingtonpost.com/world/europe/after-a-prolonged-economic-crisis-a-greek-revival/2018/03/07/a9007ffe-1bcd-11e8-98f5-ceecfa8741b6_story.html?utm_term=.775ff7ef714b
Is the Greek financial crisis over at last? - The Economist explainshttps://www.economist.com/the-economist.../is-the-greek-financial-crisis-over-at-last
How much Greece owes to international creditors | Reutershttps://www.reuters.com/.../how-much-greece-owes-to-international-creditors-idUSKCN..
I completely agree with your opinion that the crisis isn't over yet. Just because the government has recovered doesn't mean the quality of life has. Until the drastic effects of the crisis, such as high poverty rates, dip back or close to pre-crisis levels, the crisis has not ended. However, I do not fully agree with your idea to restore the economy. By focusing on infrastructure first, Greece would have a hard time bringing in money to increase its GDP. This money could then be used for infrastructure funding. In the meantime, I believe Greece should focus on its tourism and exports as a means of increasing their GDP. After the increase of their GDP and the rebuilding of their infrastructure, Greece could then focus on reducing their international debt.
DeleteI don't think Greece's economic crisis is over because many Greek citizens are still struggling with day to day life. Although the government announced that they are not in an economic crisis anymore due to the bailouts, these bailouts are actually going to international relations to ease the debt rather than focusing on Greece's own economy. That is one reason why the crisis is still going on. The unemployment rate is also very high still, and the economy won't be able to improve until the unemployment rate has drastically decreased. As stated in the article, Greece relies heavily on tourism to fund their economy, which isn't very stable. This is another reason why Greece never really came out of the economic crisis.
ReplyDeletehttps://www.nytimes.com/interactive/2016/business/international/greece-debt-crisis-euro.html
I do not think that Greece’s economic crisis is over yet. Although the country is without a doubt growing, it’s still not in position to say that it is over with. And because of it’s dependency on bailouts and help of other countries, it’s proved that they are not yet financially stable by itself. I also believe that the countries unemployment and poverty rates are much too high to consider the crisis over. But I think that as those rates lower down and start to even out to the levels they were at before the crisis, I would consider the crisis to be over.
ReplyDeleteWhile it's true that Greece's economic crisis is not "over," and that the entire population hasn't nearly escaped property, there's been a significant of improvement from its worst years. I can't seem to understand why it's totally fair to compare 2009-16 (the worst years) to Greece today in its absolutely changed state. While Greece only "officially" exited their crisis 2 years ago at most, they still have glaring economic issues. However, the amount of recovery that they've made compared to their status in years past is simply beautiful and shocking. And since Greece's "official" exit of the crisis was less than 2 years ago, it's impossible that their economy would return the place of greatest stability because of the nature of the economy in today's world. It takes years to improve the condition of a whole nation and its people, especially economically. As many people have commented, Greece was known for being in its worst state from approximate 2008/9-16. That means that it took 7 years to get where it is now, with significant but small-appearing progress with where Greece is positioned and stands today. Greece doesn't have the capacity to pay their workforce at the moment and this is the harsh reality. People are not going to get paid, people are going to starve, people are going to live difficult lives, and this is the nature of society today that we must accept as we live in our beautiful San Mateo, Foster City, NorCal "bubble." Nothing solves itself quickly and all these things take significant amounts of time in years whether anyone likes that or not.
ReplyDeleteI don't think Greece can be considered fully recovered from their economic crisis given that much of the population is still feeling its effects acutely. PM Tsipras is undeniably making steps towards a full recovery; however, having a plan of action is not the same thing as having executed that plan to the fullest and exhausting all other recovery options. Interviewees in the original article, like Mr. Zafiriou and Ms. Pavlioti, are leading lives that are light years away from their pre-economic crisis ones. The latter says that the end of the bailouts don't have any tangible effect on her day to day life. Bailouts required the Greek government to put in place austerity measures, an umbrella term for pay cuts, privatization of government industry, and tax reform-- i.e., increases (https://www.bbc.com/news/10099143). Serious economic changes with serious real-world impacts are difficult to simply bounce back from. Many Greek people are still taxed at extremely high rates to help pay off government loans, leaving them with half their salaries after taxation. Keep in mind that much of the country is on minimum wage pay. In 2018, youth employment reached 40% (https://www.pbs.org/newshour/show/greeces-debt-relief-plans-come-at-high-price-for-residents). How can Greece say that the crisis is over if almost half of the next generation-- the one that will carry Greece into the future-- is without a job? Greece needs to continue investing in solutions that will not only fix current issues, but also prevent future ones and support the next generation.
ReplyDeleteI think that the economic crisis is not over yet because if people are still suffering, the economy is not fully healed. Also, when deciding if the economy has recovered, you should take into account whether or not it is similar to the countries surrounding it. I think that they shouldn't tax the citizens because that would just make a bad situation worse. They are already living in poor conditions so taxes would just make it worse. Seeking help would help more as it would also allow them to make some connections with countries that could potentially help them. They could start new programs for businesses that encourage startups and stuff which could improve their situation. If they were to lower taxes, larger companies might want to move into Greece and help boost their economy too.
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