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2010 European Sovereign Debt Crisis

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2010 European sovereign debt crisis

Introduction

The 2010 Greek crisis started actually at/by the end of 2009 but the real effects where visible only in 2010. It is due to the world economical crisis on one hand and to own country's factors (high debt rate, approximately 120% of GDP and a budget deficit higher than 13% of GDP.

(Conditions)

L'économie de la Grèce était une des plus dynamiques de la zone euro de 2000 à 2007 avec un taux de croissance de

4.2 % grâce notamment à l'apport de capitaux étrangers[13] . Une économie dynamique et une baisse des taux

d'intérêts (grâce à son entrée dans la zone euro) permettait à la Grèce de financer d'importants déficits structurels.

Depuis son entrée dans la zone euro, la dette publique a toujours été supérieure à 100 % du PIB[14] .

This crisis was aggravated by the lack of transparency showed by the country regarding the presentation of its debt and its deficit. The crisis strengthens to extend to others countries such as Portugal and Spain, already in difficulties in terms of economical aspects.

The 2 May 2010, the Euro Zone countries, the International Monetary fund (IMF) and Greece have reached an agreement on a loan of €110 billion accorded to Greece.

Greek crisis - chronology

Economical causes of the crisis

Economical crisis 2008-2010

The financial crisis (2007-2010) followed by the economical crisis have strongly hit Greece; its two main economical sectors, tourism sector and maritime transport sector, have been severely impacted and have seen their revenues decreasing by 15% in 2009.

As a consequence, the unemployment rate has increased at/by the end of 2009 (10,3% against 7,9% at the same moment one year before).

Accounts presentation problem

Les écarts entre les documents qui lui sont présentés et la réalité amène la Commission européenne et des

responsables politiques européens à demander des explications à la Grèce[16] , à s'interroger sur le rôle joué par

Goldman Sachs[17] en tant que conseil du gouvernement grec[18] . Cette crise a entrainé une baisse de l'Euro qui

favorise les exportations et la reprise[19] .

Structural problems

The inflation rate has been strong in Greece and has engendered a competitiveness loss, leading to a strong balance of trade deficit.

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