Presentation on theme: "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."— Presentation transcript:
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
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 equipment Olive oil Feta Cheese Why is loaning money to Greece bad for Germany? It will put Germany into debt The Greeks will go on vacation with it Germany will lose its trade agreement with Japan by doing so