Greece's national debt is now bigger than the country's economy

[Mayareira]

(CNN) -- The first in what is expected to be a series of strikes has begun in Greece this week as workers protest against austerity measures imposed by a government trying to dig its way out of a financial crisis that threatens to engulf Europe.

So what's the problem in Greece?
Years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece badly exposed when the global economic downturn struck. This whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the eurozone.

How big are these debts?
National debt, put at €300 billion ($413.6 billion), is bigger than the country's economy, with some estimates predicting it will reach 120 percent of gross domestic product in 2010. The country's deficit -- how much more it spends than it takes in -- is 12.7 percent.

So what happens now?
Greece's credit rating -- the assessment of its ability to repay its debts -- has been downgraded to the lowest in the eurozone, meaning it will likely be viewed as a financial black hole by foreign investors. This leaves the country struggling to pay its bills as interest rates on existing debts rise. The Greek government of Prime Minister George Papandreou, which inherited much of the financial burden when it took office late last year, has already scrapped most of its pre-election promises and must implement harsh and unpopular spending cuts.

Will this hurt the rest of Europe?
Greece is already in major breach of eurozone rules on deficit management and with the financial markets betting the country will default on its debts, this reflects badly on the credibility of the euro. There are also fears that financial doubts will infect other nations at the low end of Europe's economic scale, with Portugal and the Republic of Ireland coming under scrutiny. If Europe needs to resort to rescue packages involving bodies such as the International Monetary Fund, this would further damage the euro's reputation and could lead to a substantial fall against other key currencies.

So what is Greece doing?
As already mentioned, the government has started slashing away at spending and has implemented austerity measures aimed at reducing the deficit by more than €10 billion ($13.7 billion). It has hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations.

Are people happy with this?
Predictably, quite the opposite and there have been warnings of resistance from various sectors of society. Farmers have begun blockading roads to demand greater government subsidies, while on February 10, workers nationwide staged a one-day strike closing airports, government offices, courts and schools. More strikes are expected to follow.

Can't Greece's European neighbors step in to help?
With the reputation of the region's single currency on the line, powerful eurozone partners are keen to see Greece's problems resolved, but analysts say European Union and European Central Bank rules are unclear and seem to rule out bloc-wide rescue packages. This leaves it up to member nations -- all of which are saddled by their own debt problems -- to cobble together their own bailout plans. There are reports that the eurozone's dominant economy, Germany, is leading calls for a "firewall" to prevent Greece's crisis from spreading, but as yet no concrete proposals have been made public.

http://edition.cnn.com/2010/BUSINESS...nda/index.html

[Maguspk]

Weren't they supposed to sell bonds like, Tuesday? How did that go? I figured Germany/France would buy some just to ensure the Euro doesn't collapse.

[Kuya]

Has Goldman Sach's hand in this been on tv yet?

[Beckwin]

How did Obama manage to fuck up Greece too?

Really wary of the IMF stepping in, because they've kinda got a history of disastrous free-market reform being required and it would not be good in the midst of the recent leftist/anarchist goings on in Greece.

[Omnipotent]

Give them the olympics again, that will help em out.

[Stumblingdrunk]

Has Goldman Sach's hand in this been on tv yet?

silly question

[Moss]

Was just reading an article today about how many economies had been fucked up by the Olympics, Greece has $17B in debt from the 2004 games

[Not Kuno]

I hope this won't interfere with my Greece trip in a few months.

[Omnipotent]

Was just reading an article today about how many economies had been fucked up by the Olympics, Greece has $17B in debt from the 2004 games

Oh shit, I always thought it was a stimulus cause of tourism etc. That sucks.

[Kuya]

Was just reading an article today about how many economies had been fucked up by the Olympics, Greece has $17B in debt from the 2004 games

Not to mention the environmental costs.

[Atreides]

just glass 'em man, let's just glass 'em

[dejet]

I hope this won't interfere with my Greece trip in a few months.

might get a ton of shit cheap there(if you dont use the euro lol)

that or you might pay out the ass, depends how this plays out! GL

[Correction]

Oh shit, I always thought it was a stimulus cause of tourism etc. That sucks.

The Olympics is historically a disaster on the balance sheet of any country who a) spends money promoting itself to the IOC then b) ponies up a shitton of dough in infrastructure/construction/security only to c) see what money does come in get siphoned off by the foreign sponsors.

[Mayareira]

'Least we can just buy the southern portion of Cyprus now.

[Moss]

Let's see... they put Sydney AU$6.6B in the hole, Salt Lake City "made" 100M, Athens down 17B, Torino cost 3B, and Beijing spent 43B

[Correction]

London is fucking doomed lol.

[Maguspk]

So why doesn't Germany just leave the European Union? lol

Agree w/ Correction on London, that shit is going to be pretty bad, they're already in bad shape the games are going to ruin them if they approach them wrong.

[Kuya]

I imagine because the EU took a lot of effort to set up to just bail at the sign of trouble.

[Vuitton]

'Least we can just buy the southern portion of Cyprus now.

My professor is one of the core people mediating the conflict resolution process between the Turks and the Cypriots, rofl. (Dr. Anastasiou) He takes a class to Cyprus every summer; I've been wanting to go.

[Mayareira]

lol, judging from his name you can just call the entire island "Kibris" to troll him to eternity. The island is boring though, if you want an awesomesouce aegean holiday bounce between Turkish(Marmaris, Bodrum, Smyrna) and Greek side of Aegean sea.