Greece's Economy

Topics: Unemployment, Macroeconomics, Recession Pages: 6 (2365 words) Published: May 6, 2013
Greece registered an increase in its Gross Domestic Product for the period of 2000-2007 averaging 4.2% compared to the 1.9% of the Euro zone. In addition, the economy experienced a reduction in unemployment by 2.9 percent, which hit a low of 8.3% in the year 2007. The growth in the economy is a significant increases in house commerce coupled with a negative contribution from the external sector. The economy adopted an expansionary monetary policy which had positive impacts on the domestic demand. However, in 2000-2007 while the skyrocketing public sector indebtedness and massive debt burden in the private sector need to get in favor advanced to private businesses and households. The high debt to GDP ratio of the economy according to the Euro zone designation was lower, and in addition, the net savings of the economy were negative implying that the existing debt could only be offset through external borrowing. As a result, the government borrowing amounted to 10% of its GDP, thus over the years the external debt grew overwhelmingly. In the year 2008, the nation’s report was 149% of its GDP this was due to a sharp increase in government spending coupled with an increase in external debt. The financial and economic crisis resulted when Greece was facing difficult situations, which consist of, foreign indebtedness, and chronic imbalances. These conditions placed Greece in a disadvantageous position in relation to the value that incurred during debt servicing. High indebtedness will provide high risk of omission as well as risk premia due to variations in interest rates. Apart from the increase in interest rates, the global economy and economic crisis negatively impacted other sectors in Greece such as the financial system, banks, trade investment, and unemployment. Recession and job

In trade, recession is an excellent introduction to business and firms are likely to reduce their tax earnings and profits decline, whereby it is affecting the manufacturer by cutting on hiring employees and freezing them alone. Expenditures incurred for promotion and marketing may also be brought down. These cost-cutting measures will affect other businesses, both large and small, which produce the goods and services used by the big manufacturer. In an effort to cut costs, and augment the bottom line, the producer may end buying new equipment, limit research and development, and prevent new product rollouts is a factor in the growth of income and market share. An unknown number of small businesses had to close as a result of the recession. Also, some larger employers, mostly in light manufacturing and typically in North Greece, relocated to other Balkan countries where labor costs and taxes are lower than in a major city in Greece, whereby the economy will always depend on the employment cost in the town of Greece. Recession and unemployment

The highest proportion of working poor in Greece has a greater impact, which affect it, fast, and low wages, inability to take full responsibility, and soft skills. Threat in recession makes everyone get up in the sleeve in retailer, big business, and on employees. The narrower claimant count of jobseekers in Greece has risen to a million mark and these but be expected to increase in the mid next year. A lot of stress and burdens in the labor market across the world has increased high rate of unemployment, due to juxtaposed with sluggish real wage growth in persistence during the recession ,which appear in domestic production due to labor market caused by, depression. The unemployment rate is a measure of the labor market’s strength, and economy which provide vital support in understanding the forces at any level. En every industry market, workers and firms customize style and policies that usually affects flow rates, such as minimum wages, severance pay, labor taxes, advice notice, and unemployment insurance. Until very recently, labor market institutions and norms in Greece appeared to favor primary...
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