Turmoil in the Streets- The Greek Government Debt Crisis Plagues the Country for more than a Decade
Figure 1: The Vasilissis Amalias Avenue (Hellenic Parliament Building) in Athens, Greece (11), pictured above, has been the focus of a number of riots and protests in response to the Greek Debt Crisis that plagued the country following the 2007-2008 financial crisis. In the late months of 2009 the Great Recession was triggered with the accumulation of structural weaknesses in the Greek economy, and the Greek government undercutting its government debt and deficit level (11).
Figure 2: The European currency, the euro (pictured above) was implemented in 2002 replacing the Greek currency, drachma. The introduction of the euro into peripheral countries like Greece was done with the purpose of reducing trade costs and increasing overall trade volume across Europe (9). However, as labor costs rose in peripheral (less developed) countries like Greece, core (more developed) countries like Germany took away from these peripheral countries (12. As a result, Greece’s trade deficit rose significantly (1).
Figure 3: The streets of Plaka (pictured above) in Athens, Greece are filled with tourists. In 2009, following the global financial crisis Greece fell further into debt as its two main income sources, tourism and shipping, fell by 15% (1).
Figure 4: Overlooking Athens, Greece. With the country facing a great decline in private investment and high currency debt, Greek wages fell nearly 20% from 2010 to 2014 through deflation. As a result of falling wages, reduced income, and a rise in debt-to-GDP ratio, a severe recession fell over the country. Unemployment rose to nearly 25% from a quoted 10% in 2003 (1).
Figure 5: Even with significant cuts in government spending, and the country returning to a budget surplus in 2014, the country would be hit hard in 2015 as banks closed for weeks to prevent a complete financial meltdown (1). As a result, citizens lost their jobs and homes, and businesses and homes like the one above fell into ruins.
Figure 6: Protest signs outside the Athens University in Plaka. Following the 2015 election of Prime Minister Tsipras (11), Greece was facing its third government bailout. By the end of June, following multiple negotiations on the bailout an agreement had yet to be made and the Greek stock market closed in addition to the banks that had closed weeks before. On July 5th a majority voted to reject the bailout terms. As a result, stocks dropped with the prospect of Greece falling out of the EU. By the middle of July an agreement had been made by Eurozone leaders. However, many large debt holders and citizens who had voted on the decision were in disagreement with the negotiation terms and results (1).
Figure 7: Now in the middle of 2017, the Greek finance ministry has reported Greek government bonds approaching pre-2010 levels. While this provides evidence that Greece could be returning to some sort of economic normalcy, many people are homeless and without work (1). 71% of the homeless population in Athens became homeless in the last five years and 21.7% in the last year alone (5,6,7). Whether it’s selling flowers or playing music in the streets, many people are left finding other ways to make extra money since there are few programs that offer aid.
Figure 8: The projected tourist view of Greece is often of the ancient ruins in Athens or the white buildings and blue roofs of Santorini. However, lack of proper housing, a high homeless rate, and declined job opportunities are still the reality of many Greek citizens.
