By Noah Taylor. Greece is applying for a second bailout. The proposed bailout is to be € 130...
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Transcript of By Noah Taylor. Greece is applying for a second bailout. The proposed bailout is to be € 130...
By Noah Taylor
Greece is applying for a second bailout.The proposed bailout is to be € 130 billion.The Greek bankruptcy originated due to
excessive government spending.Greece has announced new budget cuts to
make it more attractive as a candidate for financial aid.
One of the highest per capita arms Greece spent a excessive portion of their budget on submarines, tanks, and combat aircraft.
This was before the major recession hit Greece in 2009.
Germany is reluctant to give aid to Greece.
It has already given out bailout money to Greece as well as Spain, Ireland, and Italy.
Germany wants to maintain political strength and sovereignty while keeping the Euro strong.
If Greece stays in the EU it will keep bringing down the value of the Euro.
Because of Greece’s previously bad reputation Germany is hesitant to lend.
Germany, as all other countries do, does not want to lend money to another country that might default on the loan.
This would put Germany into debt.Debt is bad for the government as well as the
economy
Potential Consequences If Germany stays
resistant to the Greek bailout, Greece may choose to leave the EU thus adopting its own currency.
This would be a peaceful exit if it was by Greece’s doing.
Therefore, Germany could say it tried to keep the currency strong.
Cut taxes in Germany, by cutting taxes in Germany, Germans will spend more
Some of this spending will be on Greek imports, stimulating the Greek economy.
Incentivize spending in the EU rather than investment in bonds.
The EU is in a recession and more spending would help bring it out of it.
What did Greece spend its money on?Military equipmentOlive oilFeta Cheese
Why is loaning money to Greece bad for Germany?It will put Germany into debtThe Greeks will go on vacation with itGermany will lose its trade agreement with
Japan by doing so
AA
I wrote this presentation.Websites
http://www.independent.co.uk/news/world/europe/france-and-germany-to-blame-for-greece-crisis-7218923.html
http://www.guardian.co.uk/business/economics-blog/2012/feb/10/european-debt-crisis-germany-against-greece
http://www.telegraph.co.uk/finance/financialcrisis/8751180/Germany-pushes-Greece-to-the-brink-in-dangerous-brinkmanship.html
Photoshttp://www.skyscrapercity.com/
showthread.php?t=222007&page=4http://blogs.telegraph.co.uk/finance/files/
2011/09/euro_1805998c.jpg