View Full Version : The Olympics and the Economic Collapse of Greece



Steve
05-09-2010, 08:31 PM
Odd how on one mentions the Olympics and how it might have played a role in the current crisis.
This 2005 story is especially interesting to read in hindsight:
Greece: olympics, economics - MoneyWeek (http://www.moneyweek.com/news-and-charts/economics/will-greece-be-an-olympic-winner.aspx)

mugofbeer
05-09-2010, 10:38 PM
That thought had occurred to me, as well, but I didn't look into it. What I did read is that until the last year, Greece was paying it's debts satsifactorily. However, when the economy slowed and revenue collections dropped, they were unable to keep up paying their debt.

Now in normal situations, the country could allow their currency to devalue, allow inflation to set in which would help get debt payments and revenues more in line. However, because they are part of the European Union and use the Euro as their currency, they cannot devalue their currency unless all EU members allow this - which is not likely with Germany as the major player.

In general, the problems for Greece are too much government employment relative to the population, too many federal payments, too generous entitlements for retirees and too much debt overall. The only hope for Greece is if the EU buys a large portion of their debt and absorbes it across the EU.

NickFiggins
05-11-2010, 09:57 AM
When I visited Greece prior to the Games, I saw all the workings of hyper public spending. A great deal of new infrastructure was being put to country only 3 times the size of Oklahoma. For instance their subway they installed was world class, with graffiti proof walls and the construction costs billions more due archeological concerns(now thats historic preservation not this 50-80 year old stuff in OKC!). Also there government is whole inefficient, for every town their is 1 post office, so that means for Athens there is one post office. The Greeks were surprised when they got invited to the EuroZone, I am sure the Germans are regretting this now.