Economic Effects Of Grexit

Improved Essays
With this intention, if a Grexit occurs it will be having a devastating impact on its economy because they will not receive debt forgiveness for what they owe to the rest of European governments. This will cause an increase in inflation, unemployment, and their asset prices will plummet. Millions of people will wake up knowing that their Greek euro deposits have transformed into devalued Drachma deposits. More important, Greece will never get a loan from the International Monetary Fund (IMF) or from the European Central Bank (ECB) creating a great burden on its citizens because taxes will increase. Truly, a Grexit will hurt its citizens the most than the 19 European countries who use the euro, because since in 2010, many international corporations …show more content…
The second is by disrupting the other EU member states in situations similar to Greece’s. And the third is by bringing about unexpected political outcomes.”[7] This shows that European countries are most exposed to the turmoil in Greece because the Greek government is in debts with the public institution such as the European Commission Bank and International Monetary Fund who has been bailing out many EU nations that have the same austerity as the Greek’s government. Therefore, those countries in the Eurozone will be forced to write off Greece’s debts. Given that, a Grexit would be a catastrophe for the European Union due to the financial contagion that the Greek crisis can create to the indebted countries like Spain, Portugal, and Italy. Indeed, Greece’s exit can cause a prospect of contagion of bank collapses throughout European nations, leaving them with no choice but to accepted the austerity from the troika; that has to cause the economy to shrink in Greece by maximizing the debt even further. How does the Greek financial crisis affect ordinary Greeks? Greek people have been paying higher taxes since the global recession and the government keep imposing extra tax rises. There have been major public sector job losses leaving many Greeks without a job to provide the basic necessity of life such as food, water, shelters, and clothes for their families. As result of this, there have been protesting on the streets in Athens due to “…Greece’s GDP has already dropped more than 25 percent. Unemployment is hovering around 25 percent. For youths (25 and younger), the rate is roughly 50 percent.”[8] This demonstrates that the Greek’s government haven’t been able to control their finances and the Greek people are feeling poorer in the entire Eurozone. The Greek people have lost credibility of

Related Documents

  • Improved Essays

    Ap Human Geography Greece

    • 650 Words
    • 3 Pages

    The president serves a term of five years and can be re-elected by the people to serve a second term. Some of the president duties are declaring war, representing the people, appointing and dismissing government officials through Prime minister’s advice. Prime minister is appointed by the President upon assuming presidency. He is the leader of the parliament and serves to unite the government. Greece is one of oldest Euro-Atlantic member states in the region of South East Europe where it serves a prominent geopolitical role because of its geographical location next to Europe, Asia, Middle East, and Africa.…

    • 650 Words
    • 3 Pages
    Improved Essays
  • Superior Essays

    Impacts Of Tariffs

    • 1752 Words
    • 8 Pages

    Impacts of Tariffs James B. Smith Principles of Macroeconomics Professor Hovey 17 October 2015 Impacts of Tariffs A common term that you will hear in the news regarding economics is the word tariff; tariffs have all but diminished here in the United States because we have become pro free trade country. Agreements like the North American Free Trade Agreement have been formed to allow free trade among multiple countries. Tariffs can greatly benefit the economy, but can also hurt the economy depending on what the tariff pertains to.…

    • 1752 Words
    • 8 Pages
    Superior Essays
  • Improved Essays

    As a result of this, real output will shift from to P to P1. A lack of disposable income will arise from the people who have lost their jobs and will therefore demand less goods and services. Moreover, this can also lead on to the knock on affect of a loss of jobs in other areas of the economy due to there being a deficient demand. The government will then as a result of this increase expenditure as capital expenditure will increase on welfare benefits, which will mean that money cannot be spent on other supply side policies, resulting in a trade of a damaging the long run growth of AS.…

    • 784 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    One of the most valuable benefits of the European Union to its member countries is the single market it creates. The EU gives the UK access to a continually growing single market, which overcomes impediments for trade and with provisions that facilitate even greater trade. The single market concept has fostered cross-border competition since it’s inception and provides a direct foreign investment in the UK. If the UK were to leave the EU, its access to the single market would not be guaranteed, and it would lose trade benefits from other EU members. Thus, the UK would lose the trade freedom that they have come to enjoy and would be faced with protective tariffs from the international borders of the Eurozone.…

    • 1006 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    It is said that a single man can learn much from predicting the future, yet they fail to acknowledge the past. Society does not realize that the past is what makes the decisions of the presents which eventually led to the events that unfold in the future. Now, knowing that history is a reference that we refer to as in the past, then why should we not study it and learn from it. Furthermore, history is full of wars and more than often wars led to a reconstruction era for either side involved and that is the universal rule. Therefore, Greece was not exceptions to this rule, having been completely destroyed economically and politically due to the effect of World War II which lasted six grueling years from 1839-1845.…

    • 1217 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    The first article essentially argued that Trump tax cut benefited no one and had very little public support. It stated that the GOP proposed tax reform would raise taxes on most individuals including the middle class, add 13 million Americans to the ranks of uninsured all to pay for corporate tax cuts. After making these points, the article shifted gears into discussing how even CEO’s don’t support the idea. This is because they understand that changing tax rates is not that important a factor in business investment. Therefore, a huge tax cut would not lead to more spending.…

    • 417 Words
    • 2 Pages
    Improved Essays
  • Superior Essays

    Migration Experiences – Topic 2 The Greek community in Australia is a vast and vibrant one. It is estimated that there is between 600,000 and 700,000 (including 2nd and 3rd generation) living in Australia now. This report will address the reasons for their migration, impact Australian Government policies have had on their immigration and the contributions they have made to modern-day Australia. Push Factors Australia saw Greek immigration in varying eras and numbers, highly dependent on political and social issues experienced in Greece during history.…

    • 1041 Words
    • 5 Pages
    Superior Essays
  • Improved Essays

    "Any informant on Greece at all?" Turkey asked as he spun around the face his adviser who was standing nearby watching him with a judging look. The bearded man sighed, "No. There has been no information on Greece's current states... Are trades with them are still poor too, we are getting almost nothing back.…

    • 248 Words
    • 1 Pages
    Improved Essays
  • Improved Essays

    Greek Rhetoric History

    • 695 Words
    • 3 Pages

    Cameron Steele EH 102 Professor Lariscy 19 January 2018 A Brief History of Rhetoric The state of Greece was experiencing both economic and political turmoil. Greece was broken up into sections that were ruled by aristocratic families that held land.…

    • 695 Words
    • 3 Pages
    Improved Essays
  • Decent Essays

    Ancient Greece Greece is one of the oldest countries today. It has a lot of history and stories attached to it. Greece also has a lot of geography attached to it too. Greece is very mountainous and has a lot of hills. With it being very mountainous land there where not many city-states that were established, because there was no way to get over the mountains to see the other people.…

    • 340 Words
    • 2 Pages
    Decent Essays
  • Decent Essays

    Rome has a bigger impact on current day things and places than Greece. Rome has a bigger impact than Greece on things and places current day and back then. Rome has left many things that we are using today, but they did do things that have changed different places for the worst. Rome has done incredible things, for instance, the roads that people use everyday and they had even influenced architecture designs that people see in buildings for example the arch, domes, bridges, and columns. The Romans had also left was entertainment.…

    • 614 Words
    • 3 Pages
    Decent Essays
  • Improved Essays

    Greece Greece, one of the most influential countries of the world, has come up with many inventions that are still used today. Tragically, many of these concepts were lost when the Romans burned the Library of Alexandria, but there were copies of some of the information. Still, much of this valuable information was lost pushing back innovation. Not only have the Greeks brought forth many great ideas, they have also influenced other cultures. An example of this is the classical Greek architectural designs seen in government buildings.…

    • 1595 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    The Greek empire along with the Roman empire are two very influential cultures that most western ideals borrow from to this day. This includes Government, Economy, Religion, and their other various contributions to the way things are today. I will go in depth about each aspect that they gave to the western way of life, as well as some things like geography that are only applicable to them. Government: The Greeks were known for the fact that they had a major role in creating modern day democracy, they created a type of democracy where the citizens had total control over all major decisions in the government.…

    • 430 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    The EU and UK was enjoying the benefits of free-trade and after the Brexit, to enjoy the same benefit the Britain had to pay lots of tariff. Every transaction with the member countries will be charged. It will not only slow the UK’s economy but also all EU member’s economy will go down. BREXIT effects all the nations in the European union because the firms which are established in other nations may perform low when compared to previous performance, this is due to change in trade policies between the…

    • 992 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The split from the European Union, although not completely in action yet, has already had effects on the global economy. The British Pound dropped to a 31-year low,…

    • 804 Words
    • 4 Pages
    Improved Essays

Related Topics