Greek Crisis, II

 

Vocabulary

debt	annual	gross domestic product (GDP)
fiscal	feasible	schedule
owe	shamble	in the first place
coup	attempt	recipient
allow	primary	requirement
profit	end up	spike (2)
soar	average	recession
crisis	reveal	spiral (2)
falsify	expose	ever since
rate	dispute	bankruptcy
brink	jack up	chancellor
accept	reform	roughly (2)
access	pool (2)	temporary
fund	unstable	treasury bill
riot	budget	stimulate
plunge	default	heated (2)
facility

 
 
 
 
 
 
 
 
 
 
 
 
  
   
 
 
 
 
 
 
 
 

Video

 

Transcript

Greece is currently $400 billion in debt. That’s about 170% of their annual gross, domestic product.

Over the next fifty years, they are scheduled to repay that, but with the economy in shambles, many experts wonder if that goal is feasible.

But how did Greece end up with some much debt in the first place? And to whom specifically does Greece owe money?

Greece became somewhat politically and economically unstable in the 1970s after an attempted government coup.

Nevertheless, after a profit spike in the 1990s, they met the fiscal requirements to join the Eurozone in the year 2000.

This event inextricably tied Greece to stronger economies like Germany and France — and allowed Grecians more access to low-interest loans.

So public spending and government borrowing soared, even as Greece’s debt remained higher than the Eurozone average in the 2000s.

When the international recession of 2008 hit, Greece spiraled into a debt crisis.

To make matters worse, in 2009, it was revealed that Greece had been falsifying reports on its debt for years.

When the real statistics were exposed, their national credit rating took a plunge in turn, causing investors to jack up interest rates.

Greece has been on the brink of bankruptcy ever since.

German chancellor Angela Merkel later said that Europe should not have accepted Greece into the Eurozone.

Out of the roughly €300 billion in bailout money that Greece must eventually pay back, most of it, or roughly 47% is due to the European Financial Stability Facility.

This is a temporary organization created by Eurozone members to pool money and help stabilize member countries in crisis.

Greece, Portugal and Ireland are the primary recipients of the EFSF. Nineteen percent of Greece’s debts are held by other Eurozone governments.

Another twelve percent is held by private investors, and the rest, about 22% is held by the European Central Bank, the International Monetary Fund, and treasury bill holders, who are primarily Greek banks.

Yet, after all the financial help, Greece remains in trouble.

The unemployment rate for those aged 15 to 24 is at 55%.

Furthermore, budget cuts are so unpopular, they have led to riots and protests.

Meanwhile Greece and other European governments are locked in a heated dispute as to whether Greece should or even could make more financial reforms.

Germany and France, who have invested nearly $150 billion in the country, don’t want to see Greece default on its debt, but they’re also refusing to give Greece another bailout.

During the next half century, Greece needs to stimulate its economy while decreasing government spending.

In the end, most experts agree that Greece will not be allowed to go bankrupt — the loss for other Western countries, including the United States would be too great, and could create another international recession.

Questions

1. Greece is in a very precarious situation. True or false?

2. Was Greece’s economy booming in the 1970s? Was everything going well for Greece in the 1970s?

3. What happened in 2000? What was the situation for Greece after joining the euro single currency?

4. The turning point for Greece was 2009. Is this right or wrong? What happened then?

5. Had the Greek government been entirely honest, trustworthy and transparent? What was the result?

6. Greece owes $300 billion only to the European Central Bank. Is this correct or incorrect? Is Greece alone? Is Greece a unique case?

7. Have there been regrets about this situation? What is the long-term solution for Greece?

8. Since Greece and its economy are small, their problems are insignificant for the European Union and the global economy. Yes or no?

 

A. Why do you think Greece is in such a mess? What is the solution?

B. Are you familiar with other cities, states or countries in a similar situation as Greece?

C. What will happen in the future (for Greece)?

D. What is the situation with your local, regional and national government?

E. Do you know anyone who is in debt or who had gone bankrupt?