GREECE'S FINANCIAL CRISIS

Greece's financial crisis

Greece's financial crisis

Introduction

The crisis of the economy and finances of Greece (begun in 2010 and ongoing) is a national crisis that began over the debt crisis in the Euro Zone, the latter with origins in 2008. The situation worsened when it was discovered that the Greek government to hide data was macroeconomic, among them the true value of the national debt. None of the countries of the European Economic Union, much less those who are part of the Euro zone, had no idea of ??the financial disaster that was brewing under the covers of financial makeup Everywhere arose the question; How does an overnight pass Greek public debt to be from 13% to 113%? What caused the fiscal deficit to exceed the limits allowed in the Maastricht Treaty? Years of clever accounting magic was the obvious answer, after Greek Prime Minister George Papandreou rebel to the world the true figures of debt in the economy of the nation (Lynn, 2011).

Problem

The country of Greece is undergoing an economic recession resulting from the euro crisis; made famous presents the problem of uncertainty in this globalized and therefore interdependent market. Mexico being a developing country involved actively in the world economy should not stop worrying about what happens in the global environment, and to have a free trade agreement with the European Union, could be directly affected by the problem Greece. This paper explores the possibility of this happening and makes some recommendations according to it.

The outbreak of the crisis in Greece

The Greek economic crisis stemmed mainly from chronic problems, but also reflected the impact of the global crisis, which has entered a second phase, despite the recovery in global economic activity. In addition to its other woes, the Greek economy is facing an unprecedented deficit of trust and credibility. In the Greek economy crisis manifested itself with some delay compared with the rest of the Euro zone, entered a phase of recession in 2009, while in 2008 GDP growth slowed. In 2001, Greece started to make up the actual data of its public deficit to enter the euro-zone. Nine years later, the public debt soars to 113.7% of GDP, 300,000 million, and puts the Greek economy to collapse one. Regardless of cycle phase of the crisis, a particular feature of the Greek economy is its poor financial condition worsened and long term (Mitsopoulos, 2011).

Causes within Greece

Years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece exposed when the global economic crisis hit. This makeup took to the statistics, was an important part to reveal that the levels of debt and deficit exceeded the limits set by the euro area. Added to this, the Greek government contract through 2009 to more than 100 000 new staff, which granted substantial wage increases, which drove up salaries of public employees by 70%, said Vasilis Rapanos, chairman of National Bank of Greece, the first trading entity in the country, which only showed the economic waste that this ...