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Unit 2 Macro: Greece on the Brink of Default
25th September 2011
AS level economists studying macroeconomics are almost certainly going to be discussing the economics of a Greek government default in the coming days and weeks. Many of the main macro indicators for Greece have been heading in the wrong direction for some time and the country provides a rich opportunity to study the causes and consequences of a fiscal, economic and wider social crisis. I haave put together a slide presentation of ten key macroeconomic charts for Greece. Students and teachers might want to use this (and edit / improve) when discussing events as they occur in the days ahead.
The presentation can be downloaded using the link below
On the Brink of Default – The Greek Economy
• A founder member of the Euro in 2001
• After years of strong growth - went into recession in 2009
• Budget deficit was fraudulently under-reported
• Fiscal deficit surged to 15.4% of GDP in 2010
• Sharp loss of investor confidence
• Caused large rise in borrowing costs (bond yields)
• May 2010 Greece became the first euro zone member to receive a Euro 110bn rescue package from the EU and IMF
• Recession has continued
• Greece’s govt debt is now 150% of GDP and rising
• Fiscal austerity has met with fierce political unrest
• Recognition that default is inevitable
• But with what consequences for Greece and the rest of Europe?
Slide Headings
A Crisis of Confidence – Bond Yields
Real GDP Growth
Recession and Unemployment
Soaring unemployment
Decade of improved relative living standards is lost
An unsustainable level of debt
Fiscal Crisis Prompts Default
Fewer people in work and a weaker trend growth rate
Manufacturing and Property in a Slump
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.