Greece Econ Development Project
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A Commentary on Greece's Economic Outlook

A Commentary on Greece's Economic Outlook | Greece Econ Development Project | Scoop.it
Greece needs to put an end to fiscal austerity and abandon the current reform program supported by its euro area partners and the International Monetary Fund (IMF)....
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After six years of recession, Greece's economic situation is dire, but it appears to be bottoming out and preparing for recovery. Its GDP has shrunk by more than a quarter since its peak in 2007, and unemployment is at 27.8 percent as of last October (59.2 percent among Greek youth), which is the highest rate in the EU. However, Greek GDP it expected to experience a modest increase of 0.5 percent in 2014 and a 2.0-3.0 percent increase in 2015, with increases in capital stock and exports. The economy seems to be taking a turn in the right direction, as Greece's internal competitiveness has improved considerably and the external current amount showed a surplus in 2013 for the first time in many years. Also, the planned recapitalization and restructuring of the banking system has been completed, and corruption is being taken down gradually through administrative and judicial actions. This is all good, but Greece is still far from stable, and will need to continue its policies and maintain support from other eurozone countries to be fully on its way towards considerable growth.

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Greece to get next bailout loan in 3 parts

Greece to get next bailout loan in 3 parts | Greece Econ Development Project | Scoop.it
Lizzy & Hannah Greece's insight:

On April 1st, it was determined that Greece will receive another bailout, this one in three parts adding up to 8.3 billion euros. The first section of rescue loans will be distributed at the end of April for Greece to meet a bond redemption in May, and the remaining rescue loans will be paid in June and July. There is also an IMF (International Monetary Fund) portion that is paid separately. Greece has suffered the longest and most severe financial crisis of the eurozone and hopes for a positive evaluation from the eurogroup on progress made in reforms. A review by the debt inspectors of the troika (International Monetary Fund, European Central Bank and European Commission) ended last month and Greece hopes for the payment of a delayed bailout installment. Greece was the first of the eurozone countries to receive a bailout and has depended on rescue loans since 2010. It hopes for support from the other eurozone countries and to be provided with more debt relief. Seeing as Greece has a primary-budget surplus last year, they could very well benefit from more debt relief loans, as they appear to be moving in the right direction.

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Greek Economy Looks to Perform Worse Than Expected Amid Record Eurozone Unemployment Numbers - Hit & Run : Reason.com

Greek Economy Looks to Perform Worse Than Expected Amid Record Eurozone Unemployment Numbers - Hit & Run : Reason.com | Greece Econ Development Project | Scoop.it
It looks like Greece is going to have a worse year than initially thought. Lenders had predicted back in March that the Greek economy would shrink by
Lizzy & Hannah Greece's insight:

Greece's economy appears like it's going to perform even worse than originally expected, and there are record unemployment rates in the eurozone (an economic and monetary union of 18 EU states). Lenders now believe that the Greek economy will fall by 6.5%. In a few weeks, Greece is expected to default on its debt and might leave the eurozone. The government has chosen a rather unpopular bailout plan that includes 10.5 billion euro spending cuts (from public-sector salaries and bonuses and from government operating expenses) and a 3 billion increase in taxes.The spending cuts show a possible raise in the retirement age from 65 to 67, as well as wage and pension cuts. All of this while eurozone unemployment remains at record highs.

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Greece reached milestone in improving its finances, opens way for more debt relief

Greece reached milestone in improving its finances, opens way for more debt relief | Greece Econ Development Project | Scoop.it
BRUSSELS - Greece has reached a major financial milestone that its creditors demanded as a precondition for being granted more debt relief, the European Commission said Wednesday.
Lizzy & Hannah Greece's insight:

Greece appears to be moving in the right direction out of its debt crisis. Its government revenues last year exceeded expenditure (excluding interest payment and other items), attaining primary budget surplus. The surplus was of 1.5 billion euros or 0.8 percent of its annual GDP, which was above its original 2013 target. This puts them in a position to be granted more debt relief. The past few years have been hard on businesses and households alike, but their sacrifices are beginning to pay off. The country is now in its sixth year of recession and unemployment looms at 27 percent. The debt burden has reached 175 percent of GDP, and Greece hopes to lower that to 120 by early 2020's; many speculate that anything over 120 isn't sustainable for a small economy like Greece's. Lenders say that Greece must continue to implement aggressive economic reform programs in order to keep on track with its debt recovery. Although the recession has hit the Greek people hard, with unemployment holding at a record high, they appear to be moving in the right direction towards a steady recovery.

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How Greece has got itself in this mess - Telegraph

How Greece has got itself in this mess - Telegraph | Greece Econ Development Project | Scoop.it
This weekend's Greek election is being viewed as a make or break moment for the eurozone. The success of an anti-austerity party like Syriza could ultimately lead to Greece leaving the euro. Here we look at how Greece found itself in this position, what it has done so far and what might happen next.
Lizzy & Hannah Greece's insight:

The article discusses Greece's struggle with debt and explains the way they got into their economic crisis. Greece spent years living beyond its means, and as government spending increased, tax income fell short because of tax evasion. As a result, when worldwide economic downturn started, their government wasn't able to effectively deal with it. Greece had received two bailouts, but it hasn't helped considerably. There was discussion of exiting the euro, which would have a mixed impact. Firstly, the cost of imports (food and medicine for Greece) could sharply rise as the value of the new currency drops, and Greece will have difficulty borrowing money. The adjustment could put businesses on edge as to whether to convert contracts to the new currency or to keep them in euro valuations, and could also result in bank runs if Greece's citizens become nervous and withdraw their savings. However, in the long-run, Greece could potentially benefit from having a more competitive exchange rate, which would cause exports to increase and hold Greece's position as a tourist destination. I don't personally think it would be wise for Greece to abandon the euro because it would initially be too risky and given it's already rocky economic situation, the transition could result in chaos. Instead of having more bailouts, I think they should focus more on spending cuts, since the bailouts haven't been as effective.

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