Why is greece in a debt crisis?
Im trying to finish homework, its late, help me out? Explain this is simple terms.
Also answer theses:
What is the impact of this crisis on America?
What are some arguements about this topic?
thanks
Sorry to answer this question late.
Here is a link to an article in the FT today which will give you the answer about Greece:
http://www.ft.com/cms/s/0/a0574c54-046e-11df-8603-00144feabdc0,dwp_uuid=2b8f1fea-e570-11de-81b4-00144feab49a.html?nclick_check=1
The problems in Greece are slightly different from countries such as the USA and UK in that these countries are suffering from banking/financial institution losses which have precipated a shortage of liquidity worldwide. Greece has been overspending on its public sector and the worries are that it can not now service that debt because of the economic downturn generally and shortage of capital in the global economy -i.e. it can’t borrow any more. So, in many ways Greece is collateral damage in the financial crisis.
If you look at the Ft article-there is comment that Greece has been fudging its figures- so has everyone else. The losses still in the banking mess have still not been fully accounted for (some estimates suggest that only 50% has been acknowledged). So a lot of countries are in an even worse situation but have buried their heads.
Incidentally, there is great fear in the UK that our sovereign debt will be downgraded by the rating agencies – that’s really bad. It’s just slow release of information -that’s all.
Because we took 100 sub-prime loans and packaged them together with some prime loans, chopped em up into something smaller than repackaged the pieces and sold them to whoever would buy.
and then peeps stop paying their mortgages.
The main argument is gov’t broke it , should gov’t fix it the same way.
References :
Sorry to answer this question late.
Here is a link to an article in the FT today which will give you the answer about Greece:
http://www.ft.com/cms/s/0/a0574c54-046e-11df-8603-00144feabdc0,dwp_uuid=2b8f1fea-e570-11de-81b4-00144feab49a.html?nclick_check=1
The problems in Greece are slightly different from countries such as the USA and UK in that these countries are suffering from banking/financial institution losses which have precipated a shortage of liquidity worldwide. Greece has been overspending on its public sector and the worries are that it can not now service that debt because of the economic downturn generally and shortage of capital in the global economy -i.e. it can’t borrow any more. So, in many ways Greece is collateral damage in the financial crisis.
If you look at the Ft article-there is comment that Greece has been fudging its figures- so has everyone else. The losses still in the banking mess have still not been fully accounted for (some estimates suggest that only 50% has been acknowledged). So a lot of countries are in an even worse situation but have buried their heads.
Incidentally, there is great fear in the UK that our sovereign debt will be downgraded by the rating agencies – that’s really bad. It’s just slow release of information -that’s all.
References :