CRISIS IN GREECE
Bastaubaeyeva Aliya
The Republic of Kazakhstan, Almaty
Crisis
- is any event that is, or expected to lead to,
an unstable and dangerous situation affecting an individual, group, community
or whole society. Crises are deemed to be negative changes in the security, economic, political, societal or environmental affairs, especially when they occur abruptly, with
little or no warning. More loosely, it
is a term meaning 'a testing time' or an 'emergency event' [1]. Crisis first of
all shows hidden conflicts and disproportions. Obvious example of crisis – is
revolution. Consider as phenomenon
(undiscovered law), economical factor (concerted action), and political, social
and economical category [2]. Usually crises begin by making mistakes basing on
economical reforms or implement it not completely and create only one half.
This effected all spheres of state. Generally all spheres managed by state and
tightly connected with economic and finance.
Financial crisis – sharply falling course of financial
assets often can be “overheating of economy” – fictitious capital grows up than
original capital for many times [3]. The term financial crisis is
applied broadly to a variety of situations in which some financial institutions
assets suddenly lose a large part of their value. First financial crisis began
88 BC in the republic of Rom, and last one began in 2007 and continues till
nowadays.
The Republic of Greece situated on southern part
of Europe. Now Greece heir of Ancient Greece, a place where Western civilization
was born, motherland of democracy and one of Europe countries who had first met
crisis.
Greece is one of the developed countries and in
1981 became part of European Union. Decade till the crisis economical indicates
of Greece was high as well developed countries. Within the annual GDP (Gross
Domestic Product) indicators grows up for 4%, its growth rate was higher than
the developed countries. Such excellent results take affect after the large
sums of subsidies of European Union. The flow of foreign investment and
privatization program of objects by government gave a positive results, the
growth of tourism has enabled the development of economy [4]. In the second
half of 2000’s as additional factor growth of economy was construction of new
infrastructure project, one of them is Olympic Games in 2004 which took place
in capital Athens. Unprofitable state budget was decreased so they could borrow
cheap credits.
If economy increase only on paper, it doesn’t
mean that it is same with reality. In conclusion certainly it will be beginning
of crisis. One third of Greece people work in public service or in national
enterprise, but particular this area developed big system of high leveled
corruption and this field is consider as not effective [5].
Information given by Greece Bank, if
population of Greece will not change till 2050 number of adult nation will
increased and payment of pension get over from GDP 12.4% to 22.6%, and for
pensioners needs size extend from general GDP 23.4% [6]. Apart from this,
government spends budget funds to buy arsenal because of competition in region
with Turkey, generally complicate the situation. For defense in 2005 spend from
GDP about 4.3%, with this indicator Greece takes third place after Israel and
Turkey among countries in Organization for Economic Co-operation and
Development [7].
Taking into account the high GDP
growth, government took advantage and get loans from members of European Union. In my opinion in that case
sum of loan is bigger than development of country. Actually economy was not
stable and country’s economical reforms were crude that’s why finally every
step was wrong.
The external debt of Greece grew by
another 41.8% billion euros in 2010 and increased to 340.2 billion euros, or
149% of GDP. According to the Audit Court’s data in 2009 the external debt was
298.5 billion euros or 127% of GDP [8]. By the end of 2009, the Greek economy
(based on data revised on 15 November 2010 in part due to reclassification of
expenses) faced the highest budget deficit and government debt to GDP rise in
the European Union. The 2009 budget deficit stood at 15.4% of GDP. This and
rising debt levels (127% of GDP in 2009) led to rising borrowing costs,
resulting in a severe economic crisis [9].
Economists who favor this radical approach
to the Greek debt crises, typically, argue that an orderly default is
unavoidable for Greece at the long term, and that a delay in organizing an
orderly default (by lending Greece more money through out a few more years),
would just wind up hurting European Union lenders and neighboring European
countries even more. However, if Greece were to leave the euro, the economic
and political impact would be devastating. The Greece’s hard position is same
to another countries in European Union. Journalists and financial experts named
them shortly PIGS (Portugal, Italy, Greece and Spain) [10].
Generally at this moment Greece have debts in all sectors and it
turned out how much exactly they in debt. Now it is not a secret how much and
from which country Greece takes a billions of euro. In that case Greece and
European Union have same aim, how to survive from formed situation. Various
types of questions appeared. Will EU help? European Union will give or not
second helping? Whether it will be a member of EU, will they use euro or return
again to drachma? The leader of German
Chancellor and France President Nicolas Sarkozy make a suggestion concern to
stabilize economical condition:
1.
Germany demand
Greece to give all budget policy to European Union institutes; there are
discusses and proposals between Euro groups, one of them Germaine’s. As help
for government initiates to make constructively program, because reforms made
by Greece avoids of main aim [11].
2.
Deutschland request
to make control and check reforms made by government. To define all
international loan creditors – International Monetary Fond (IMF), European
Commission (EC), European Central Bank (ECB), European Union (EU) should give
report to this organizations [12].
3.
On December 2011
European Union had summit to discuss second helping concerning Greece, euro
politics and financial ministers participated and suggest 130 billion euro to
withstand crisis.
4.
To reduce pension
benefits. By estimating this step will save an additional 325 million euros
[14].
In order Greece had same moments where they can agree
or disagree with European Union. Prime – minister of Greece Lucas Papademos talking about big
pressure under European countries. He is against of intervention through
internal policy. Lucas Papademos’s opinion every state should control his own
activities. European Union introduce a motion which can dangerous for
independence of Greece. Till this day because of such thing they don’t accept
these proposals.
However,
on 20th March of 2012 Greece should pay first loan percentages, is
as follows 14.5 billion euro. Government announce that they couldn’t pay all
sum [15].
To conclude, crisis which began 2009 till now have
unexpected continue. There are many unsolved problems. If Europe countries
unite solve problem together, we can believe from this point in future European
Union will exist. In my opinion if you try to solve problem from the beginning
it is rather easier, but to settle different problems in it’s culmination much
harder. To make everything on time is better, afterwards it would be heavy
responsibility, it will not be just Greece lose still lose of European Union.
Nobody can give guarantee it will not happened in another successful country.
Used literature
www.en.wikipesia.org/wiki/Crisis
«Кризис» в словарях русского языка – Яндекс.Словари
Глущенко В. В. Введение в кризисологию. Финансовая кризисология. Антикризисное
управление — М.: ИП Глущенко В. В., 2008, ст. 88.
Квашнин Ю. Мировая экономика и
международные отношения, 2011, № 4, ст.70-78.
Согласно индексу экономической свободы, ежегодно рассчитываемому газетой The
Wall Street Journal,
по уровню коррупции Греция обгоняет все страны ЕС, кроме
Литвы.
The
rising Demands of an Ageing Population.
www.eng.bankofgreece.gr/en/announcements
www.cia.gov/library/publications
www.ru.wikipedia.org/wiki/Экономика_Греции
Богдановский А. Греции
грозит политическая и экономическая дестабилизация - эксперты, РИА новости (21.01.2010).
www.ru.wikipedia.org/wiki/PIGS
www.hvylya.org/analytics/economics/18565-rol-germanii-v-evrope-i-evropejskom-dolgovom-krizise.html
http://www.ria.ru/world/20120220/570724936.html
http://delo.ua/world/es-otlozhil-vydelenie-pomoschi-grecii-173520/
см. 13