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Yearbook 2011

Greece. Greece's debt crisis escalated during the year and in November forced the Social Democratic government under Giorgos Papandreou to resign and surrender to a unifying government under former governor Lucas Papademos. Concerns were affecting the entire world economy.

2011 Greece

According to Countryaah official site, the Greek central government debt was estimated at 162% of GDP and the budget deficit for 2010 was larger than projected. According to Greece, the explanation was mainly reduced tax revenue due to income reductions and reduced consumption. The credit rating agencies have on several occasions lowered the country's status to new bottom levels, all in the field "worthless". Interest rates on the country's commercial loans were pushed up to levels Greece could not possibly pay. The International Troika, the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), therefore, prepared additional rescue packages following the € 110 billion promised in 2010 and partially paid out.

The counterclaims were harsh and the Greek Parliament voted through several radical austerity packages. Taxes were increased and tax legislation was tightened, wages in the public sector were reduced by at least 20% and many public employees were laid off from their jobs. But the troika found that it was not enough. Pensions were not lowered as promised, labor law was not sufficiently weakened and tax collection did not tighten. In addition, the privatizations of state-owned postal and telecommunications companies, ports, airports and other properties, which were intended to generate revenue of EUR 50 billion, did not go ahead. Sales were made more difficult by the fact that few buyers were interested in the often inefficient state companies. Within the PASOK government party, there was also resistance to selling state property and deteriorating conditions for public servants. EU:

The cuts hit hard. Many Greeks could not afford to pay their bills. Schools and healthcare lacked resources. Drug abuse and crisis-related diseases such as AIDS, TB and hepatitis increased, as did the number of suicides. The resistance from the people was strong. Demonstrations regularly degenerated into violence. The school, healthcare, the banking sector, the media, the justice system and the electricity and water utilities were shaken by repeated strikes that paralyzed everyday life.

Papandreou announced on October 31 that the Greeks would have to decide on the loan terms in a referendum. His idea was that the austerity demands a popular anchorage, but the risk of a no was imminent. This would mean that the next payment was withheld, which would probably lead to the bankruptcy of Greece. The criticism of Papandreou was devastating both by eurozone leaders and the Greek opposition as well as by his own leaders, including from Finance Minister Evangelos Venizelos who had taken office as late as June.

Papandreou announced his departure on November 8. As his successor emerged Papademos, a partisan economist who was previously Governor of the ECB and Vice President of the ECB. His unity government with ministers from PASOK, ND and the right-wing LAOS was sworn in on November 11. The government promised that privatizations, cuts and tax collection would be stepped up in exchange for a payment of EUR 8 billion from a new rescue package totaling EUR 130 billion. International banks also promised to write off 50% of the Greek debt.

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