Why Greece Is The Precursor To The Next Global Debt Crisis
The one undeniable truth about the debt drama in Greece is that each of the conventional narratives—financial, political and historical—has some claim of legitimacy.
For example, spendthrift Greeks shunned fiscal discipline: here’s an account from 2011 that lays out the gory details: The Big Fat Greek Gravy Train: A special investigation into the EU-funded culture of greed, tax evasion and scandalous waste.
Or how about: Greek reformers want to fix the core structural problems but are being stymied by tyrannical European Union/Troika leaders: The Greek Debt Crisis and Crashing Markets.
Rather than get entangled in the arguments over which of the conventional narratives is the core narrative—a hopeless misadventure, given that each narrative has some validity—let’s start with the facts that are supported by data or public records.
The Greek Economy Is Small and Imbalanced
Here are the basics of Greece’s economy, via the CIA’s World Factbook:
Greece’s population is 10.8 million and its GDP (gross domestic product) is about $200 billion (This sourcestates the GDP is 182 billion euros or about $200 billion). Note that the euro fell sharply from $1.40 in 2014 to $1.10 currently, so any Eurozone GDP data stated in dollars has to be downsized accordingly. Many sources state Greek GDP was $240 billion in 2013; adjusted for the 20% decline in the euro, this is about $200 billion at today’s exchange rate.
Los Angeles County, with slightly more than 10 million residents, has a GDP of $554 billion, more than double that of Greece.
The European Union has over 500 million residents. Greece’s population represents 2.2% of the EU populace.
External debt (public and private debt owed to lenders outside Greece):
$568.7 billion (30 September 2013 est.)
National debt:
339 billion euros, $375 billion
Central Government Budget:
revenues: $119.5 billion
expenditures: $127.9 billion (2014 est.)
Budget surplus (+) or deficit (-):
-3.4% of GDP (2014 est.)
Public debt:
174.5% of GDP (2014 est.)
Labor force:
3.91 million (2013 est.)
GDP – per capita (Purchasing Power Parity):
$25,800 (2014 est.)
Unemployment rate:
26.8% (2014 est.)
Exports:
$35.8 billion (2014 est.)
Imports:
$62.8 billion (2014 est.)
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