Sam Drimakis
(Assistant Professor, Webster University, Athens Campus)
Abstract
This is an opinionated paper on how the Greek Economic Crisis occurred and how it presents a threat to the European Union in terms of its continuation. The research methods of observations and media headlines regarding this issue is used. My opinions on how the Greek economic crises is persistent due to external and internal factors fueling the crisis is shown. Using this as a guide is up to the readers’ discretion.
Keywords: Greek Government, Crisis, Debt, Germany, Eurozone
The Greek crisis is not one of economic crisis only but of social and political nature as well, with foreign influence that causes it to be on going. The chief contributor to Greece's financial crisis is so familiar to Americans who hit tough times in 2008. After all it is the same problem spending. Consumers who become over-leveraged and spent more than they take home. What Greece did it undertook a policy of deficit spending to support its vast social programs? They were mismanaged and ballooned out as the Greek economy soured. The Greek governments borrowed to finance its overspending, issuing debt at an increasing rate. As Greek law makers continued to increase the country's debt load, anxious investors increased the cost of borrowing for Greece by widening the bond yield spreads and increasing the risk premium for credit default swaps on Greek debt. To put it simple as Greece continued to borrow at high levels, the cost of borrowing money increased too, making each euro dollar borrowed cost more in interest than the last...Read more
