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10 Greek Debt Crisis Facts – WMNews Ep. 13


as an anti-austerity party takes power

as an anti-austerity party takes power in Greece a serious confrontation looms

in Greece a serious confrontation looms

in Greece a serious confrontation looms between the new government and its

between the new government and its

between the new government and its eurozone creditors throwing into

eurozone creditors throwing into

eurozone creditors throwing into question the stability of this troubled

question the stability of this troubled

question the stability of this troubled economic union welcome to watchmojo.com

–nt we’re counting down 10 crucial

–nt we’re counting down 10 crucial facts you should know about the Greek

facts you should know about the Greek

facts you should know about the Greek debt crisis number 10

debt crisis number 10

debt crisis number 10 when did the crisis begin the United

when did the crisis begin the United

when did the crisis begin the United States entered into a recession in 2007

States entered into a recession in 2007

States entered into a recession in 2007 after the collapse of its subprime

after the collapse of its subprime

after the collapse of its subprime mortgage industry which prompted a

mortgage industry which prompted a

mortgage industry which prompted a worldwide economic downturn known as the

worldwide economic downturn known as the

worldwide economic downturn known as the Great Recession securities backed by

Great Recession securities backed by

Great Recession securities backed by these subprime mortgages had been traded

these subprime mortgages had been traded

these subprime mortgages had been traded worldwide and infected markets globally

worldwide and infected markets globally

worldwide and infected markets globally European governments were forced to bail

European governments were forced to bail

European governments were forced to bail out their banking systems which held a

out their banking systems which held a

out their banking systems which held a lot of these assets on their books these

lot of these assets on their books these

lot of these assets on their books these bailouts combined with existing high

bailouts combined with existing high

bailouts combined with existing high levels of government debt throughout

levels of government debt throughout

levels of government debt throughout Europe sparked doubt among investors as

Europe sparked doubt among investors as

Europe sparked doubt among investors as to whether European governments could

to whether European governments could

to whether European governments could successfully refinance their debt loads

successfully refinance their debt loads

successfully refinance their debt loads which ultimately led to the European

which ultimately led to the European

which ultimately led to the European sovereign debt crisis data for France

sovereign debt crisis data for France

sovereign debt crisis data for France showed the PMI they’re recording its

showed the PMI they’re recording its

showed the PMI they’re recording its biggest fall since the index began 14

biggest fall since the index began 14

biggest fall since the index began 14 years ago by 2009 it had become clear

years ago by 2009 it had become clear

years ago by 2009 it had become clear that some eurozone countries would

that some eurozone countries would

that some eurozone countries would require assistance from external

require assistance from external

require assistance from external institutions in order to manage their

institutions in order to manage their

institutions in order to manage their debt and one of these nations was Greece

debt and one of these nations was Greece

debt and one of these nations was Greece number 9 what were the underlying causes

number 9 what were the underlying causes

number 9 what were the underlying causes of the crisis since the mid 70s the

of the crisis since the mid 70s the

of the crisis since the mid 70s the Greek government had been running a

Greek government had been running a

Greek government had been running a deficit funded by issuing government

deficit funded by issuing government

deficit funded by issuing government bonds the introduction of the European

bonds the introduction of the European

bonds the introduction of the European common currency the euro in 1999 created

common currency the euro in 1999 created

common currency the euro in 1999 created a situation in which all European bonds

a situation in which all European bonds

a situation in which all European bonds were considered the same meaning Greece

were considered the same meaning Greece

were considered the same meaning Greece would pay significantly less interest on

would pay significantly less interest on

would pay significantly less interest on the bonds at issue this encouraged

the bonds at issue this encouraged

the bonds at issue this encouraged Greece to continue disastrously

Greece to continue disastrously

Greece to continue disastrously excessive deficit spending with the

excessive deficit spending with the

excessive deficit spending with the country’s government even making

country’s government even making

country’s government even making arrangements with financial institutions

arrangements with financial institutions

arrangements with financial institutions like Goldman Sachs to conceal their true

like Goldman Sachs to conceal their true

like Goldman Sachs to conceal their true level of borrowing at the same time the

level of borrowing at the same time the

level of borrowing at the same time the Greek government consistent

Greek government consistent

Greek government consistent failed to collect all of the taxes that

failed to collect all of the taxes that

failed to collect all of the taxes that were owed to them this combined with a

were owed to them this combined with a

were owed to them this combined with a large public sector kept Greek

large public sector kept Greek

large public sector kept Greek government spending high and pushed

government spending high and pushed

government spending high and pushed Greeks debt to GDP ratio to 146 percent

Greeks debt to GDP ratio to 146 percent

Greeks debt to GDP ratio to 146 percent by 2010 number eight how did the crisis

by 2010 number eight how did the crisis

by 2010 number eight how did the crisis evolve the economic crisis in Greece was

evolve the economic crisis in Greece was

evolve the economic crisis in Greece was exacerbated in April 2010 when the

exacerbated in April 2010 when the

exacerbated in April 2010 when the credit rating agency Standard & Poor

credit rating agency Standard & Poor

credit rating agency Standard & Poor downgraded Greece’s credit rating to

downgraded Greece’s credit rating to

downgraded Greece’s credit rating to junk status meaning it was not worthy of

junk status meaning it was not worthy of

junk status meaning it was not worthy of investment this effectively closed off

investment this effectively closed off

investment this effectively closed off private capital markets to Greece as a

private capital markets to Greece as a

private capital markets to Greece as a source for borrowing money international

source for borrowing money international

source for borrowing money international financial service agencies like Standard

financial service agencies like Standard

financial service agencies like Standard & Poor continuously monitor a country’s

& Poor continuously monitor a country’s

& Poor continuously monitor a country’s creditworthiness which in turn

creditworthiness which in turn

creditworthiness which in turn determines what interest rate a

determines what interest rate a

determines what interest rate a country’s bonds should yield by June

country’s bonds should yield by June

country’s bonds should yield by June 2011 Greece’s credit rating had dropped

2011 Greece’s credit rating had dropped

2011 Greece’s credit rating had dropped to triple C the lowest credit rating in

to triple C the lowest credit rating in

to triple C the lowest credit rating in the world and the country’s interest

the world and the country’s interest

the world and the country’s interest rates shot back up to pre Euro rates

rates shot back up to pre Euro rates

rates shot back up to pre Euro rates Greece earned this Triple C rating due

Greece earned this Triple C rating due

Greece earned this Triple C rating due to the belief that it might actually

to the belief that it might actually

to the belief that it might actually default on its debt obligations

default on its debt obligations

default on its debt obligations essentially meaning that the country

essentially meaning that the country

essentially meaning that the country would declare bankruptcy number seven

would declare bankruptcy number seven

would declare bankruptcy number seven what was the response to the crisis

what was the response to the crisis

what was the response to the crisis facing the prospect of default by mid

facing the prospect of default by mid

facing the prospect of default by mid 2010 Greece entered into loan agreements

2010 Greece entered into loan agreements

2010 Greece entered into loan agreements with a group of creditors consisting of

with a group of creditors consisting of

with a group of creditors consisting of other eurozone countries the

other eurozone countries the

other eurozone countries the International Monetary Fund and the

International Monetary Fund and the

International Monetary Fund and the European Central Bank which was

European Central Bank which was

European Central Bank which was nicknamed the troika the first loan

nicknamed the troika the first loan

nicknamed the troika the first loan package was agreed to on May 2nd 2010 to

package was agreed to on May 2nd 2010 to

package was agreed to on May 2nd 2010 to the tune of 110 billion euros due to

the tune of 110 billion euros due to

the tune of 110 billion euros due to extreme circumstances the European Union

extreme circumstances the European Union

extreme circumstances the European Union met in July 2011 to structure a second

met in July 2011 to structure a second

met in July 2011 to structure a second loan package of 109 billion euros then

loan package of 109 billion euros then

loan package of 109 billion euros then in October 2011 eurozone leaders and the

in October 2011 eurozone leaders and the

in October 2011 eurozone leaders and the International Monetary Fund came to a

International Monetary Fund came to a

International Monetary Fund came to a joint agreement with banks in order to

joint agreement with banks in order to

joint agreement with banks in order to write off 50% of Greece’s debt over the

write off 50% of Greece’s debt over the

write off 50% of Greece’s debt over the next nine years in a plan to reduce the

next nine years in a plan to reduce the

next nine years in a plan to reduce the country’s debt to 120 percent of GDP by

country’s debt to 120 percent of GDP by

country’s debt to 120 percent of GDP by 2020 number six what were the conditions

2020 number six what were the conditions

2020 number six what were the conditions of Greece’s loan

of Greece’s loan

of Greece’s loan Greece was forced to implement severe

Greece was forced to implement severe

Greece was forced to implement severe austerity measures in return for

austerity measures in return for

austerity measures in return for receiving loans from the troika this

receiving loans from the troika this

receiving loans from the troika this included significant spending cuts

included significant spending cuts

included significant spending cuts public sector salary and pension cuts

public sector salary and pension cuts

public sector salary and pension cuts and the privatization of national

and the privatization of national

and the privatization of national industries these measures were met with

industries these measures were met with

industries these measures were met with public resistance in the form of

public resistance in the form of

public resistance in the form of widespread protests and a general

widespread protests and a general

widespread protests and a general nationwide strike

nationwide strike

nationwide strike so Madhavan party gallop student party

so Madhavan party gallop student party

so Madhavan party gallop student party debate masked protesters clashed with

debate masked protesters clashed with

debate masked protesters clashed with police on the streets of major cities

police on the streets of major cities

police on the streets of major cities hurling petrol bombs with some

hurling petrol bombs with some

hurling petrol bombs with some confrontations leading to several deaths

confrontations leading to several deaths

confrontations leading to several deaths and hundreds of injuries in 2012 the IMF

and hundreds of injuries in 2012 the IMF

and hundreds of injuries in 2012 the IMF admitted that they did not foresee the

admitted that they did not foresee the

admitted that they did not foresee the overall impact of the austerity measures

overall impact of the austerity measures

overall impact of the austerity measures which actually worsened the Greek

which actually worsened the Greek

which actually worsened the Greek recession violent riots erupted in the

recession violent riots erupted in the

recession violent riots erupted in the Greek capital of Athens throughout that

Greek capital of Athens throughout that

Greek capital of Athens throughout that year number 5 what were the consequences

year number 5 what were the consequences

year number 5 what were the consequences of austerity very sort of Lucien against

of austerity very sort of Lucien against

of austerity very sort of Lucien against the government the austerity measures

the government the austerity measures

the government the austerity measures held deep ramifications for Greece and

held deep ramifications for Greece and

held deep ramifications for Greece and severe consequences for its citizens as

severe consequences for its citizens as

severe consequences for its citizens as of February 2015

of February 2015

of February 2015 unemployment hovered around 26 percent

unemployment hovered around 26 percent

unemployment hovered around 26 percent and for those under the age of 25 that

and for those under the age of 25 that

and for those under the age of 25 that number pizzas high as 50 percent about a

number pizzas high as 50 percent about a

number pizzas high as 50 percent about a third of the population had by that

third of the population had by that

third of the population had by that point sunk below the poverty line Greece

point sunk below the poverty line Greece

point sunk below the poverty line Greece had the highest child poverty rate in

had the highest child poverty rate in

had the highest child poverty rate in Europe with nearly forty point five

Europe with nearly forty point five

Europe with nearly forty point five percent of children trapped in

percent of children trapped in

percent of children trapped in impoverished circumstances furthermore a

impoverished circumstances furthermore a

impoverished circumstances furthermore a study found that after every new round

study found that after every new round

study found that after every new round of austerity measures wasn’t forced

of austerity measures wasn’t forced

of austerity measures wasn’t forced suicide rates in men and women increased

suicide rates in men and women increased

suicide rates in men and women increased by 12% to 36% and remained high the

by 12% to 36% and remained high the

by 12% to 36% and remained high the conditions that the troika requested in

conditions that the troika requested in

conditions that the troika requested in return for bailing out the Greek economy

return for bailing out the Greek economy

return for bailing out the Greek economy were so harsh that it prompted one

were so harsh that it prompted one

were so harsh that it prompted one United Nations official to speculate

United Nations official to speculate

United Nations official to speculate that they constituted human rights

that they constituted human rights

that they constituted human rights violations number four

violations number four

violations number four how has the crisis affected Europe

how has the crisis affected Europe

how has the crisis affected Europe Greece was set to receive a final batch

Greece was set to receive a final batch

Greece was set to receive a final batch of funding On February 28 2015 however

of funding On February 28 2015 however

of funding On February 28 2015 however Greece’s recently elected left-wing

Greece’s recently elected left-wing

Greece’s recently elected left-wing government had proclaimed its desire to

government had proclaimed its desire to

government had proclaimed its desire to halt austerity and renegotiate the terms

halt austerity and renegotiate the terms

halt austerity and renegotiate the terms of its debt even suggesting that a

of its debt even suggesting that a

of its debt even suggesting that a round of debt Forgiveness would be

round of debt Forgiveness would be

round of debt Forgiveness would be necessary German Chancellor Angela

necessary German Chancellor Angela

necessary German Chancellor Angela Merkel signaled that more loans would

Merkel signaled that more loans would

Merkel signaled that more loans would not be extended to Greece nor would any

not be extended to Greece nor would any

not be extended to Greece nor would any more of its debt be forgiven by that

more of its debt be forgiven by that

more of its debt be forgiven by that point it was likely that if an agreement

point it was likely that if an agreement

point it was likely that if an agreement were not reached Greece would default on

were not reached Greece would default on

were not reached Greece would default on its debt and exit the eurozone that

its debt and exit the eurozone that

its debt and exit the eurozone that theoretical event would likely cause a

theoretical event would likely cause a

theoretical event would likely cause a ripple effect that would see other

ripple effect that would see other

ripple effect that would see other indebted countries choosing to leave

indebted countries choosing to leave

indebted countries choosing to leave their debts and the euro zone behind

their debts and the euro zone behind

their debts and the euro zone behind causing the complete breakdown of the

causing the complete breakdown of the

causing the complete breakdown of the eurozone with dire economic consequences

eurozone with dire economic consequences

eurozone with dire economic consequences for every European country number 3 who

for every European country number 3 who

for every European country number 3 who is in charge now the problem is not just

is in charge now the problem is not just

is in charge now the problem is not just clearly just just great its European

clearly just just great its European

clearly just just great its European problem Greece is a part of the eurozone

problem Greece is a part of the eurozone

problem Greece is a part of the eurozone and the problem of debt of Greece is a

and the problem of debt of Greece is a

and the problem of debt of Greece is a part of over of a bigger european

part of over of a bigger european

part of over of a bigger european problem on january 25th 2014 alexis

problem on january 25th 2014 alexis

problem on january 25th 2014 alexis tsipras the leader of Greece’s leftist

tsipras the leader of Greece’s leftist

tsipras the leader of Greece’s leftist political party the coalition of the

political party the coalition of the

political party the coalition of the radical left or syriza as it’s commonly

radical left or syriza as it’s commonly

radical left or syriza as it’s commonly known became the new prime minister of

known became the new prime minister of

known became the new prime minister of greece cyprus was part of the Greek

greece cyprus was part of the Greek

greece cyprus was part of the Greek Communist Youth Organization in the

Communist Youth Organization in the

Communist Youth Organization in the 1980s and in the 90s rose to political

1980s and in the 90s rose to political

1980s and in the 90s rose to political prominence as a leader of the student

prominence as a leader of the student

prominence as a leader of the student movement

movement

movement soon after the new government was formed

soon after the new government was formed

soon after the new government was formed discussions began between Greece’s new

discussions began between Greece’s new

discussions began between Greece’s new finance minister Yanis varoufakis and

finance minister Yanis varoufakis and

finance minister Yanis varoufakis and Europe’s financial officials bata

Europe’s financial officials bata

Europe’s financial officials bata focused toward Europe drumming up

focused toward Europe drumming up

focused toward Europe drumming up support for Cerises

support for Cerises

support for Cerises anti austerity and debt negotiation

anti austerity and debt negotiation

anti austerity and debt negotiation platform upon which they had campaigned

platform upon which they had campaigned

platform upon which they had campaigned and won the support of the Greek

and won the support of the Greek

and won the support of the Greek electorate vada Farkas managed to gain a

electorate vada Farkas managed to gain a

electorate vada Farkas managed to gain a sympathetic ear from many in Europe most

sympathetic ear from many in Europe most

sympathetic ear from many in Europe most notably the French but the Germans

notably the French but the Germans

notably the French but the Germans remained steadfast in their refusal to

remained steadfast in their refusal to

remained steadfast in their refusal to entertain his proposals number two what

entertain his proposals number two what

entertain his proposals number two what is the new government’s vision the new

is the new government’s vision the new

is the new government’s vision the new Greek finance minister devised a plan to

Greek finance minister devised a plan to

Greek finance minister devised a plan to end the country’s austerity measures

end the country’s austerity measures

end the country’s austerity measures while also cutting Greece’s debt Greece

while also cutting Greece’s debt Greece

while also cutting Greece’s debt Greece would swap the outstanding debt for new

would swap the outstanding debt for new

would swap the outstanding debt for new growth linked bonds this new plan came

growth linked bonds this new plan came

growth linked bonds this new plan came in the wake of his previously stated

in the wake of his previously stated

in the wake of his previously stated goal which was to spearhead a write-off

goal which was to spearhead a write-off

goal which was to spearhead a write-off of Greece’s foreign debt this previous

of Greece’s foreign debt this previous

of Greece’s foreign debt this previous plan was unacceptable to Germany and

plan was unacceptable to Germany and

plan was unacceptable to Germany and other creditor countries due to the fact

other creditor countries due to the fact

other creditor countries due to the fact that it implied a loss to taxpayers in

that it implied a loss to taxpayers in

that it implied a loss to taxpayers in their countries but who focuses

their countries but who focuses

their countries but who focuses overarching message

overarching message

overarching message was that the original loans extended to

was that the original loans extended to

was that the original loans extended to Greece were completely irrational to

Greece were completely irrational to

Greece were completely irrational to begin with his argument was that in 2010

begin with his argument was that in 2010

begin with his argument was that in 2010 Greece effectively became insolvent and

Greece effectively became insolvent and

Greece effectively became insolvent and the euro zone’s response was to extend

the euro zone’s response was to extend

the euro zone’s response was to extend and pretend meaning they extended more

and pretend meaning they extended more

and pretend meaning they extended more loans to the country while pretending

loans to the country while pretending

loans to the country while pretending that there was a realistic possibility

that there was a realistic possibility

that there was a realistic possibility that they could be repaid number one how

that they could be repaid number one how

that they could be repaid number one how will the Greek people move forward but a

will the Greek people move forward but a

will the Greek people move forward but a focus a former economics professor at

focus a former economics professor at

focus a former economics professor at the University of Athens chose to play

the University of Athens chose to play

the University of Athens chose to play hardball with the European Union making

hardball with the European Union making

hardball with the European Union making drastic proposals that he knew would

drastic proposals that he knew would

drastic proposals that he knew would attract a lot of media attention his

attract a lot of media attention his

attract a lot of media attention his strategy was considered risky and it

strategy was considered risky and it

strategy was considered risky and it remains unclear if it will be effective

remains unclear if it will be effective

remains unclear if it will be effective the Greek government will not negotiate

the Greek government will not negotiate

the Greek government will not negotiate with the troika only with official

with the troika only with official

with the troika only with official partners there was widespread

partners there was widespread

partners there was widespread recognition among economists that there

recognition among economists that there

recognition among economists that there was no real possibility of Greece ever

was no real possibility of Greece ever

was no real possibility of Greece ever repaying its entire debt in order to

repaying its entire debt in order to

repaying its entire debt in order to keep the eurozone intact the European

keep the eurozone intact the European

keep the eurozone intact the European Union will likely reach a compromise

Union will likely reach a compromise

Union will likely reach a compromise that would involve extending the

that would involve extending the

that would involve extending the February deadline while also extending

February deadline while also extending

February deadline while also extending the period when Greece’s debt repayments

the period when Greece’s debt repayments

the period when Greece’s debt repayments would be due and offering a lower or

would be due and offering a lower or

would be due and offering a lower or even 0% interest rate cereza for their

even 0% interest rate cereza for their

even 0% interest rate cereza for their part will likely try to stay true to

part will likely try to stay true to

part will likely try to stay true to their vision of social justice providing

their vision of social justice providing

their vision of social justice providing aid to those Greeks hit hardest by

aid to those Greeks hit hardest by

aid to those Greeks hit hardest by austerity measures did these facts

austerity measures did these facts

austerity measures did these facts surprise you to vote for which news

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