atlas wealth advisors // greek crisis
TRANSCRIPT
While Greece may be defaulting on its debts, this isn’t the first time and might not be the last.
BONUS FACTGreece's annual production of olive oil weighs as much as 1,575 blue whales.
With a history of not paying debts and protesting austerity measures, Greek financial troubles are likely to continue.
Sources: http://edition.cnn.com/2015/07/06/europe/greece-how-did-we-get-here | http://www.businessinsider.com/mind-blowing-facts-about-greece-economy-2015-6Securities offered through WFG Investments, Inc., Member FINRA & SIPC. Investment advisory services offered through WFG Advisors, LP.
At the end of June, Greece defaulted on a repayment to the International Monetary Fund.
WHY IT HAPPENED
2001
2002
2004
August
2004 The budget deficit was not 1.5%, as reported, but 8.3% -- five and a half times higher than thought.
Two years later, a new government came to power and discovered something
February
2012
February
2015
June
2015
Bogus figures hid the true extent of its deficit
Greece became the 12th -- and last -- country to join the Eurozone before the launch of the euro at the beginning of 2002.
Greece adopted the Euro
The Olympics were held in
Greece
The Greek government concealed relevant figures.
2008
In 2008, the country's tax collection, such as it was, collapsed. The hole in the budget grew too big to hide. Other Eurozone countries helped.
Greece was hit far harder than many
other countries
Borrowing new money to pay old
debts
Hence thecurrent crisis
2008-2009
2008
The other Eurozone countries, in the form of the so-called troika -- the European Commission, the European Central Bank and the International Monetary Fund -- stepped in to prop up the patient.
International lenders rescued Greece
Bailout ledto layoffs
Relations between representatives of the international lenders and Greek Prime Minister, Alex Tsipras and his finance minister, Yanis Varoufakis, were poor – hampering negotiations.
But the country ran out of money again
Greece has a history of financial troubles
WHY IT COULD HAPPEN AGAIN
49.7%
63.5%
Greece is almost five times the size of Massachusetts, but Massachusetts' GDP is twice that of Greece.
Greece has spent a combined 90 years, almost half of the time since its independence, in financial crisis.
of Greece’s young active population is unemployed.
Corruption costs Greece about 8% – 10% of GDP per year.
of Greeks between ages 18 – 34 live at home with their parents.
Protests grew and the government accepted another bailout loan. A new austerity plan was agreed upon.
The government had to improve its tax collection and save money in an effort to bring its budget into balance. Unemployment rose, depressing government tax revenues.
Greece cooked its books & hid its economic problems from other Eurozone Members. This would prove staggering.
The country’s first default occurred way back in the fourth century B.C.