All the implemented
austerity measures have helped Greece bring down its primary deficit—i.e., fiscal deficit before interest payments—from €24.7bn (10.6% of GDP)
in 2009 to just €5.2bn (2.4% of GDP) in 2011,[42][43] but as
a side-effect they also contributed to a worsening of the Greek recession,
which began in October 2008 and only became worse in 2010 and 2011.[44] The
Greek GDP had its worst decline in 2011 with −6.9%,[45] a year
where the seasonal adjusted industrial output ended 28.4% lower than in 2005,[46][47] and with 111,000 Greek companies going
bankrupt (27% higher than in 2010).[48][49] As a
result, Greeks have lost about 40% of their purchasing power since the start of the crisis,[50] they
spend 40% less on goods and services,[51] and
the seasonal adjusted unemployment rate grew from 7.5% in September 2008 to a
record high of 27.9% in June 2013,[52] while
the youth unemployment rate rose from 22.0% to as high as 62%.[53][54] Youth unemployment ratio hit 16.1 per cent in 2012.[55][56][57]
During the course of
2010–12 it became evident that, out of eighteen eurozone states, four (Greece,
Ireland, Portugal and Cyprus), facing persistent negative growth prospects and
increasing government debt, would find it difficult or impossible to repay or refinance their
government debt without the assistance of bailout support from the Troika (EC,
IMF and ECB).
The crisis had
significant adverse economic effects and labour market effects for the worst
affected countries, with unemployment rates in Greece and Spain reaching 27%,[14
Contagion was considered
possible. Greece was bailed out in 2010 with a 110 billion euro direct loan by
the European Union and the International
Monetary Fund. After 2 years of
fiscal austerity and Greek riots, another 130 billion euro loan was made. Greek
austerity programs greatly reduced public pensions and public wages.[17]
Think-tank Bruegel
calculates that Greece paid a sum equal to around 2.6pc of its GDP (rather than
the widely quoted figure of around 4pc) to service its loans last year.
Comments
Greek government corruption is a primary reason for the
decline. Politicians passed pension laws
allowing retirement as early as age 45 to as old as 61. Pensions continued for 200,000 Greeks after
their deaths. Politicians traded
government jobs for votes.
Norb Leahy, Dunwoody GA Tea Party Leader
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