Abstract

The case discusses the sovereign debt crisis Greece suffered after 2009. The unsustainable debt levels and the under reported fiscal deficit data pushed Greece to the verge of a default. However, the European Central Bank, European Commission, and the IMF came up with bailout packages to save the country from a default. But this brought in its wake a lot of austerity measures for the citizens which soon spurred protests throughout the country. Greece enjoyed the confidence of investors around the globe after it entered the Eurozone and showed phenomenal growth rates between 2001 and 2008. However, after the 2008 financial crisis when credit was not easily accessible, Greece’s debt levels were exposed. The new government in 2009 said the earlier government had intentionally under reported the fiscal deficit figures. This announcement changed the fate of Greece. Analysts and economists around the world began discussing possible solutions, which included more aid along with severe austerity measures and even Greece’s exit from the Eurozone. As of mid-2014, the economy was showing signs of revival, but Greece still needed to find ways to remain buoyant.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the formation of the Eurozone and the reasons behind the consistent attempts to create unity among the countries in Europe.
• The benefits and problems associated with a common currency.
• Study the economic history of Greece.
• Analyze the importance and outcomes of Greece’s entry into the Eurozone.
• Understand the main reasons for the economic crisis in Greece.

Keywords

Greece economy, Debt Crisis, Recession, European union, Eurozone debt crisis, Unemployment, Fiscal monitoring, Budget deficit, Recovery, GDP, Austerity Measures , Debt default, Political situation, Bailout package, GREXIT