The Greek debt crisis began in 2009 and is still ongoing. During this period many changes have occurred in Greece. The income of Greeks has been reduced, the political situation has changed radically, the unemployment has been increased, many austerity bills have been approved by Greek parliament and the protests and riots are very frequent.
so we all know what the Greek debt crisis is really about: Greece borrowed more money than they can pay back. So far so simple.
Greece was living beyond its means even before it joined the euro. After it adopted the single currency, public spending soared.
Public sector wages, for example, rose 50% between 1999 and 2007 - far faster than in most other eurozone countries. The government also ran up big debts paying for the 2004 Athens Olympics.
And while money flowed out of the government's coffers, its income was hit by widespread tax evasion. So, after years of overspending, its budget deficit - the difference between spending and income - spiralled out of control.
Moreover, much of the borrowing was concealed, as successive Greek governments sought to meet the 3%-of-GDP cap on borrowing that is required of members of the euro.
When the global financial downturn hit - and Greece's hidden borrowings came to light - the country was ill-prepared to cope.
Debt levels reached the point where the country was no longer able to repay its loans, and was forced to ask for help from its European partners and the IMF in the form of massive loans.
In the short term, however, the conditions attached to these loans have compounded Greece's woes.
Policy recommendations and conclusionHaving discussed the likely causes and possible outcomes of the Greek debt crisis, Iwould like to discuss possible solutions to policy makers to recover form this crisis.First and foremost, austerity measures should be taken by Greece and other troubledEurozone members. These may include, increase in taxes to increase government...