Greece: Economic and Public Financial Situation

Greece: Economic and Public Financial Situation Greece: The Economic and Public Financial Situation S. Henry – J. Girigori – L. Davelaar ICUC MBA XI SUMMARY Greece is going through a very tense season related to their economy for a while now. They are facing ultimatums to correct their financial situation, taking measurements if they want to continue being part of the European Union. Greece’s economy rely majorly on service delivery areas, under which Tourism is one of the biggest income generating post (about 73% of the GDP). In 1980, Greece joined the European Union and in 2002 they officially adopted the Euro as a generic monetary agreement between the EuroZone. Greece, had different benefits since there merging with the EU. Their input per year account for about 2.35% of the GDP of Greece. Additionally, Greece received on a structural basis an EU funding of 20 billion from 1994 to 1999 and of 24 billion from 2000 to 2013. These funds has been used to lower the country’s deficit and to further development the country. Greece is currently progressing slowly in defeating the huge problems they were confronting with this torturous recession. Even though this recession was and still is a difficult period for Greece, we must accredit for the fact that they managed to achieve some quantifiable results with the challenges they confronted with the adjustments. As Greece and the other debtor countries such as Spain, Italy, Ireland and Portugal are heading towards default, the whole continent of Europe is in danger. Even though the economy of these countries are relatively small in comparison with several other members of the euro zone, they form a huge threat due to the huge interconnection of the European financial system because of the euro. As mentioned before, Euro is the common currency for the entire European Union, and this group known as the Eurozone is affected due to wide range of currency fluctuations and the Drastic fall in the value of Euro. The countries, forming part of the Eurozone, who agree to support Greece of preventing them from getting to default, were directly and immediate impacted by the financial crisis in Greece. As per most articles describe that the most viable option right now is to not exit the Eurozone and come to a deal in order to come out of the budget deficit they are in. Without a centralized fiscal union countries will continue to run deficits, accumulate depths, degrade the value of euro and threaten stability of Europe. Table of Contents (Jump to) SUMMARY INTRODUCTION CHAPTER 1 Greece and Economy Before Crisis 1.1 Public Finances the Crisis 1.1.1 European Union privileges CHAPTER 2 Greece Their Current Situation 2.1 Private consumption and unemployment 2.2 Investments 2.3 Uncertainty an liquidity 2.4 Current Public finance vs the international economy CHAPTER 3 Impact Greece on EURONET and Rest of The World 3.1 What is Grexit and the Impact CONCLUSION References Figures INTRODUCTION Greece is going through a very tense season related to their economy for a while now. They are facing ultimatums to correct their financial situation, taking measurements if they want to continue being part of the European Union. Greece is part of the European Union which consist of some countries united by the euro in the euro zone. And this group is about to financially collapse, due to financial problems from Greece and fellow countries as Spain, Portugal, Ireland and Italy. This situation is threatening to bring down the complete European continent and the rest of the World. In this paper, we will elaborate on the Economic developments around Greece prior becoming part of the European Union and when they adopted the Euro as their monetary identity. We will give an inside on Greece’s economic status before 2000 – 2002, during the adoption of the Euro (after 2002) and all the related consequences for themselves as well as the whole European Union and EuroZone countries. We will discuss, their Public Finances, International Economic aspects, some Domestic Economical aspects and their relationship and limitations with the other countries around the world. CHAPTER 1: Greece and Economy Before Crisis Greece’s economy rely majorly on service delivery areas, under which Tourism is one of the biggest income generating post (about 73% of the GDP). In 1980, Greece joined the European Union and in 2002 they officially adopted the Euro as a generic monetary agreement between the EuroZone. This adoption of the Euro, gave the country an increase in consumer’s spending which on its turn gave the country a boost in the economic growth. During this period Greece experienced great rates of growth. Figure 1, gives an overview of the GDP rate from 1996 until a dip (+ -0.2) in 2001 and a much greater dip (+ -0.7) in 2005. However, due to international financial crisis in 2008, also Greece started experiencing deficits within their economical budget, which had as a consequence the start of an economic crisis. 1.1 Public Finances the Crisis Public finances started going drastically in the negative direction, and same was the case for misreported statistics, which consequently had an effect on credit rating agencies, who limited the possibility of Greece to request additional credits. This limitation pushed Greece in more financial instability with a debt crisis as a result. 1.1.1 European Union privileges Greece, had different benefits since there merging with the EU. Their input per year account for about 2.35% of the GDP of Greece. Additionally, Greece received on a structural basis an EU funding of 20 billion from 1994 to 1999 and of 24 billion from 2000 to 2013. These funds has been used to lower the country’s deficit and to further development the country. To be able to continue receiving support and assistance of other EU countries and international lenders, the Government of Greece started a 3-year program, in the attempt to start pushing back on the debts. This program consisted of: Limiting government spending Resizing the public sector Reforming health care Revising tax regime The idea was for this new approach to help Greece to reduce the deficit by 4% of the GDP as per 2010 and by 3% of the GDP by 2012. The major deficit generating posts resulted to be the tourism the shipping industry. Another aspect that contributed to the crisis of Greece is a trade deficit in which in 2009, the import was about 64 billion whilst the export reached merely 21 billion. CHAPTER 2: Greece Their Current Situation Greece is currently progressing slowly in defeating the huge problems they were confronting with this torturous recession. Even though this recession was and still is a difficult period for Greece, we must accredit for the fact that they managed to achieve some quantifiable results with the challenges they confronted with the adjustments. This statement was set after the completion of the review mission for Greece which was conducted by the staff team of the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF). This review was based on policies that they managed to create with the staff level authority in order to monitor compliancy with the terms and conditions that were set for the Program. The staff team and the authorities are well aware and also agree that Greece is at a beginning of an economic stability and a balance for a gradual restart or reboot of growth which is almost in line with their previous projections. Prices are adjusting and inflation is below the euro area average. The conditions to sustain this growth are available but the risks, uncertainty and restrained financing conditions are delaying the process of recovering and measuring the public finance. The real GDP increased with 0.8% in 2014 for the first time since 2007. The private consumption and the net exports caused economic activities that resulted in a 0.8% growth of the real GDP. 2.1 Private consumption and unemployment Due to reduction on the the prices and adjustment on the labor market, private consumption experienced an increase for the first time after 5 years of an ongoing contraction. The drop in oil prices and return of â€Å"under-the-mattress† deposits can benefit the Private consumption. Increase of net export was the result of improvement of service export caused by tourism, shipping sectors and goods export. The devalution of the euro can lead to more export growth in 2015 for tourism and shipping. At the same time the strong domestic demand is increasing import. In 2014, 100.000 new jobs were created which reduced the unemployment rate 26.5% . For this year the rate is projected to drop slightly to 25.6%. Once the expected growth in 2016 picks up the unemployment rate is expected to reduce further to 23.2%. 2.2 Investments Same as the real GDP and net export the investments experienced a minor increase for the first time since 2008 and is mainly caused by equipment investment. The uncertainty of investors not investing in Greece is still limiting the credit supply from the financial sector.The real GDP is projected to increase to 2.9% this year, as investment recuparate with the help of structutal reforms. 2.3 Uncertainty an liquidity Uncertainty and lack of clear vision on the policy stance of the new government that was elected last December 2014, is damaging the postive momentum for Greece. The economic sentiment indicator (ESI) worsen last March because of the diminishing confidence in the business sectors. This significant political uncertainty is a result of having recent election for a new government in January when the country has a scheduled expiry date of the Programme set for February 28th. The newly-elected government negotiated an extension of 4 months of the Programme. The extension allows Greek authorities to design and implement in coordination with EC/ ECB and IMF, reforms of the review and design follow up procedures to reach a succcessful conclusion of the Programme. The following agreements were agred upon with the new goverernment: 1 May: Loan interest payment of â‚ ¬200m to the International Monetary Fund (IMF), with a few days grace due to the long bank holiday weekend 8 May: Payment of â‚ ¬1.4bn maturing 6 months Treasury bills 12 May: Loan payment â‚ ¬760m of IMF loan 15 May: Payment of â‚ ¬1.4bn maturing 3 months Treasury bills End of May: â‚ ¬2.5bn to pay salaries and pensions 30 June: Expire day of the â‚ ¬240bn bailout agreement between the euro zone and Greece June and July: â‚ ¬6.7bn due to be repaid to the European Central Bank The current account balance is projected to improve the forecast due to weakning euro as well as the ongoing structural and institutional reforms. The current CA deficit is estimated to decrease to 1.6 5 of GDP this year to 1.4% in 2016. The forecast for the headline balance must be lowered for this year and 2016 to -2.1% and -2.2% of GDP. This is a reflection of the weaker than expeted revenue, as a result of lower growth hampering the rebound in collection after the first three months of the year. Assuming that the profits from the Eurosystem securities transactions, SMP and ANFA programmes, are transferred will most probably lead to new fiscal measurements. Limitations on expenses were obligatory in 2014 and will remain the same in the future. This year the governmment’s debt-to-GDP ratio is due to reach it’s peak and start declining in 2016. Having back-loaded payment arrangements for the European Financial Stability Facility (EFSF) loans together with favourable intrest rates and better cash management will add to the process of keeping interest expenditure low for a longe period , eventhough the stock of debt is high. 2.4 Current Public finance vs the international economy As Greece and the other debtor countries such as Spain, Italy, Ireland and Portugal are heading towards default, the whole continent of Europe is in danger. Even though the economy of these countries are relatively small in comparison with several other members of the euro zone, they form a huge threat due to the huge interconnection of the European financial system because of the euro. Greece borrowed money from banks, investors and other governments throughout Europe. As they are reaching closer to default everyone that lent them money is vulnerable and becomes financially weaker including the ones that lent to the lenders of Greece. The problem of Greece is affecting the whole European continent and is triggering a chain reaction of defaults. If Greece defaults, so will Spain, Italy, Ireland, Portugal and so one until it reaches the complete European continent with consequences for the whole World. Even if the other Nations adapt the austerity measurements on Greece and Germany and the other countries bail them out so they can pay their depths, there is no guarantee or system in place to avoid this from reoccurring. CHAPTER 3:  Impact Greece on EURONET and Rest of The World As mentioned before, Euro is the common currency for the entire European Union, and this group known as the Eurozone is affected due to wide range of currency fluctuations and the Drastic fall in the value of Euro. The countries, forming part of the Eurozone, who agree to support Greece of preventing them from getting to default, were directly and immediate impacted by the financial crisis in Greece. There is fright of a possible domino effect on the economy of Portugal, Ierland, Italy and Spain, well known as PIIGS, as result of the problems associated with the Greece economy. This fright has the consequences that the interest rates will be increased, which will reflect in a higher outflow for the countries when borrowing in the open market. The Global banking system will be affected also by the Greece crisis and also some other Global major banks who have invested in Greece when they issues their bonds or requested to invest in Greece. This means that the Grexit will have a direct impact on these investors, which will have difficulties getting their investment back. At the same time you will have the ordinary people who has their money in the pension funds. Grexit will have direct affect on the current funds. The unemployment percentage in Greece, which has been growing because of the economy crisis, will also have direct impact. Because of the relation with other market in the open market, these other markets will also be affected one way or the other, which might have an affect in their on their currency. The European Union, shorted as EU, has been formed with the countries that are members nowadays. They give the monetary the value that it has, which means that if one left, the value of the currency will also tend to drop, which has as consequences increasing its competiveness. 3.1 What is Grexit and the Impact? In February this year, the Eurozone gave the government of Greece an extension of 4-month period in order to come back with a plan on how they will proceed. Grexit, which stand for ‘Greece Exit’. It is important to differentiate the short and the long run when exiting the Eurozone. In the short run the economy of Greece might suffer a severe GDP contraction. In short run, currency devaluation, credit crash and a tighter fiscal stand will be the consequences. So far it seems that there is general consensus that if Grexit come true, there will be a severe direct impact on Greece. There are some who think that Greece should leave the euronet under the argument that on the long run, Greece will have a boost with a looser monetary policy and a cheaper currency. Segura-Cayuela, argue that having a weaker currency will be positive for the economy only if Greece implements the reform that the country has failed to implement to avoid Grexit. According to BAMLs Athanasios Vamvakidis, the new Greek currency could devalued by 50% after the Grexit. In summary exiting the Eurozone, Grexit, will: Reintroduce the drachma, which means that the euro will stop its existence in the country of Greece. Drachma was the currency Greece has. There exist the possibility to change the name. What will be the value of the currency is a question mark and a big issue is how much is the government allowed to print for the country. People might start pulling their money from their banks accounts. Being part of Eurozone, Greece has the access to emergency liquidity from the ECB, Euro Central Bank, means this option will not be possible anymore. Immediate spike inflation will be effective, which will do more damage to the economy of the country. Unemployment will peak higher then it is right now, which will have direct impact on the economy and social economy. CONCLUSION As per most articles describe that the most viable option right now is to not exit the Eurozone and come to a deal in order to come out of the budget deficit they are in. It would be to risky to get out of the Eurozone and still survive in this economy of today. The direct impact will be to big for the country and the recovery period might be to long. Grexit will also have an impact on the other countries in the Eurozone, there public finance will also be impacted. It might also impact the entire world in the financial aspect. Maintaining the Eurozone and implement a general fiscal policy, should be able to control the trading of the Eurozone members and mitigate a country getting into huge budget deficit. As the Euro area (euro zone) countries are using a fundamental division of a monetary policy and a fiscal policy, the euro requires a fiscal union and a monetary union to have some kind of â€Å"control† in the monetary system. By replacing this with one political organization with the authority to set fiscal policy within every euro area country with the power to cut spending, raise taxes, and set laws. A fiscal union like this can prevent excessive borrowing and spending like the case of Greece. The challenges to accomplish this central fiscal union are enormous but not impossible to realize. A Unites State of Europe. Without a centralized fiscal union countries will continue to run deficits, accumulate depths, degrade the value of euro and threaten stability of Europe. References Visited websites: (http://www.tradingeconomics.com/greece/gdp-growth) (visited on May 29th, 2015) (http://theindiaeconomyreview.org/Article.aspx?aid=41mid=3) (visited on May 29th, 2015 http://ec.europa.eu/economy_finance/eu/countries/greece_en.htm European (visited on May 29th, 2015) Commission- Economic and Financial Affairs- Economies of member states (visited on May 30th, 2015 (http://fpc.state.gov/documents/organization/142363.pdf) (visited on May 30th, 2015) http://ec.europa.eu/economy_finance/eu/forecasts/2015_spring/el_en.pdf (visited on May 31st, 2015) Viewed Video: GREECE The recovery fails to accelerate amid high political uncertainty Source: Bloomberg Published on Feb. 12 The European Debt Crisis by Jonathan Jarvis (viewed on May 29th, 2015) Figures Figure 1. This figure gives an overview of the GDP flow of Greece in the period of 1996 to 2005.

Little Miss Sunshine Film Essay

Little Miss sunshine released in 2006, directed and produced by Jonathon Dayton and Valerie Farris represents many complicated family issues. The film establishes these in many situations by the use of film symbolic, written, audio and technical codes and convention an issue that arose was that the main character Olive’s brother is in an oath of silence. That the family have many complicated ambitions, and that Olive wants to participate in a young girls beauty pageant ‘Little Miss Sunshine’ which breaches many moral values through out the film, Throughout the film you can see the family draw closer together and begin to over come many of their issues as a family. The film Little Miss Sunshine focuses on a young girl whose life was altered by the changing nature of society whereby â€Å"Child Beauty contests† define physical attraction and personality at as young as 8 years old. The pressure of the â€Å"beauty myth† is an onset for young children to follow societal expectations whether it be through beauty contests, fashion aimed at pre-teens or young adult celebrities acting as role models. An example of low self-esteem is shown through the restaurant scene where Olive is self-conscience when ordering ice cream. This provides the audience with an understanding of the new-formed issues faced by young women in today’s society due to the expectations of the â€Å"beauty world.† Dayton and Faris use the visual techniques of costuming, whereby the children are spray tanned, lathered with makeup and expose their bodies to exaggerate the young children to physically look older. This has caused sudden dispute within modern day society as expectations for women have started to occur at much younger ages. All of the characters have an ambition that is highlighted throughout the movie, for instance Dwayne takes an oath of silence on behalf of a German philosopher Frederick Nietzche, Dayton and Faris chose not to explain what connection Dwayne had with this man but does show he is dedicated to this mans beliefs, having a poster of him, a shirt with Nietzches face on it and shows him reading a book titled after him. Dwaynes ambition is to be a test pilot for the u.s army which is cut short when they find out he is colourblind, through his sheer anger and rage he gets out of the car and breaks his vow of silence, later in the film Dwayne talks to Frank film conventions create an issue of dysfunctionality and happiness through the use of symbolic codes In the film the old yellow Volkswagen represents happiness represents happiness with an unappealing aspect which connects inextricablly with the family. The van symbolises the family very well as they

Frankenstein Film Adaptation Comparison Essay

Kenneth Branagh’s 1994 film adaptation of Mary Shelley’s Frankenstein greatly differed from the original novel written in 1818. Not only were certain elements altered however in addition, the personalities of several major characters, and how the audience portrays them was quite different. For example, the main distinction within the novel and the film are the role of women. In the novel, Elizabeth is treated as a trophy; her opinions are not important to Victor. In the novel, Victor treats women passively and feels superiority to them; he cannot take advice from them. Women play a more relaxed role in the novel. They do not make any decisions, and allow me to take advantage of them. This is seen primarily when Victor decides the fate of Elizabeth when they are young and that how one day they will be wed. However in the novel, Elizabeth is a young determined and driven woman. She does not allow Victor to take advantage of her, nor does she let Victor make her decisions. For example, Elizabeth walks out on Victor before the wedding. She does this out of anger and frustration due to not understanding the current situation; the creatures ultimatum. This demonstrates the audience that Elizabeth is not afraid of taking initiative and standing up for what she believes to be right. Next, the character of Victor Frankenstein has greatly differed from the novel to the film. For example, in the novel, Victor is conveyed as a monster whose decisions cause the death of many, including his loved ones. However, the film does not portray his demonic character traits, but those of a kind noble gentleman. For example in the novel, when Justine is being trialed, Victor does not care to help her. He would rather protect his image, than save the life of a young innocent girl. In addition he believes her death to be collateral damage and unimportant to him. Contrary, in the film, Victor attempts to save Justine, making him look less like a monster and more humane. He runs through the village attempting to save her. Moreover, in the film, when Victor creates life, he does not abandon it. He attempts to help it up and save it, however the creature becomes caught in chains and hung, therefore leading Victor to believing it was dead. The film does not transmit Victor’s evil and malicious personality; rather it showcases Victor’s internal self as a good individual whose fate was predetermined by God. The film does not depict how Victor Frankenstein, in the novel, is a shallow, self centered, egotistical individual. Moreover, I preferred the novel to the film for the sole reason that in the film Victor’s internal character was falsely depicted. Victor is supposed to be a monster who does not think rationally, however in the film, his character stood for the exact opposite. His character attempted to save the life of Justine, as well as save the creature he had bred life into. Furthermore, in the film, the creature’s character is show to be more like a monster. For example, in the novel, the creature does not steal from the cottagers, whereas in the film he steals food from the starving cottagers. Next, when the creature and the Victor are discussing the ultimatum, the creature tells Victor that he enjoys murdering people. On the contrary, in the novel, especially at the end, the creature admits that the guilt of murder is overwhelming and therefore he cannot live with his shame. Furthermore, I did appreciate the ability for women to seize power of their decisions however, the over glorification of Victor’s personality is a complete disgust, and therefore changes my appreciation of the film. In my personal opinion, the lesson of never judging someone for their appearance was not properly showcased. Unlike the novel, the film does not deliver the idea that even if someone where to look like a normal human, they could in fact be a monster, and that people must look beyond the superficiality of one’s exterior to fully appreciate the individual.

Name That -nym A Brief Introduction to Words and Names

Weve all played with words that have similar or opposite meanings, so no points for recognizing synonym* and antonym. And in the online world, almost everyone seems to rely  on a pseudonym. But what about some of the lesser known -nyms (a suffix derived from the Greek word for name or word)? If you recognize more than five or six of these 22 terms without looking at the definitions, youre entitled to call yourself a genuine Nymskull. Click on each term to visit a glossary page where youll find additional examples and more detailed explanations. AcronymA word formed from the initial letters of a name (for example, NATO, from North Atlantic Treaty Organization) or by combining the initial letters of a series of words (radar, from radio detection and ranging).AllonymThe name of a person (usually a historical person) assumed by a writer as a pen name. For example, Alexander Hamilton and James Madison published The Federalist Papers under the allonym Publius, a Roman consul.AntonymA word having a meaning opposite to that of another word. Antonym is the antonym of synonym.AptronymA name that matches the occupation or character of its owner (such as Mr. Sweet, the owner of an ice cream parlor), often in a humorous or ironic way.CharactonymA name that suggests the personality traits of a fictional character, such as Mr. Gradgrind and MChoakumchild, two unpleasant educators in the novel Hard Times, by Charles Dickens.CryptonymA word or name that is secretly used to refer to a particular person, place, activity, or thing—such as Radiance and Rosebud, the code names used by the Secret Service for the daughters of President Obama.DemonymA name for the people who live in a particular place, such as New Yorkers, Londoners, and Melburnians.EndonymA name used by a group of people to refer to themselves, their region, or their language, as opposed to a name given to them by other groups. For example, Deutschland is the German endonym for Germany.EponymA word (such as cardigan) derived from the proper name of a real or mythical person or place (in this case, the Seventh Earl of Cardigan, James Thomas Brudenell).ExonymA place name that isnt used by the people who live in that place. Vienna, for example, is the English exonym for the German and Austrian Wien.HeteronymA word that is spelled the same as another word but has a different pronunciation and meaning—such as the noun minute (meaning 60 seconds) and the adjective minute (exceptionally small or insignificant).HomonymA word that has the same sound or spelling as another word but differs in meaning. Homonyms include both homophones (such as which and witch) and homographs (such as lead singer and lead pipe).HypernymA word whose meaning includes the meanings of other words. For example, bird is a hypernym that includes more specific varieties, such as crow, robin, and blackbird.HyponymA specific term that designates a member of a class. For example, crow, robin, and blackbird are hyponyms that belong to the broad class of bird.MetonymA word or phrase used in place of another with which it is closely associated. White House is a common metonym for the U.S. president and his or her staff.MononymA one-word name (such as Oprah or Bono) by which a person or thing is popularly known.OronymA sequence of words (for example, ice cream) that sounds the same as a different sequence of words (I scream).ParonymA word derived from the same root as another word. Poet Robert Frost offers two examples: Love is an irresistible desire to be irresist ibly desired.PseudonymA fictitious name assumed by an individual to conceal his or her identity. Silence Dogood and Richard Saunders were two of the pseudonyms used by Benjamin Franklin.RetronymA new word or phrase (such as snail mail or analog watch) created for an old object or concept whose original name has become associated with something else.SynonymA word having the same or nearly the same meaning as another word—such as bombed, loaded, and wasted, three of the hundreds of synonyms for drunk.ToponymA place name (such as Bikini Atoll, the site of nuclear weapons tests in the 1950s) or a word coined in association with the name of a place (such as bikini, a brief bathing suit). * If you already knew that poecilonym is a synonym for synonym, go directly to the head of the class.