The Greek Economic Crisis: 5 Charts That tell The Story

Posted on November 4, 2011 Updated on May 19, 2014

The “spread” over 10-year German bunds is the standard measure of perceived risk. It is the premium, or additional interest, that markets demand for holding the debt of a euro-zone country compared with the bonds isued by Germany, deemed the safest.

• November 2009 – The new government pledges in its 2010 draft budget on Nov. 5 to save Greece from bankruptcy by cutting the budget deficit of 12.7 percent of GDP
  
•  Nov. 20 Greece aims to cut the deficit to 8.7 percent of GDP in 2010
  
• Dec 4: public debt rising to 121 percent of GDP in 2010 from 113.4 percent in 2009.

• EU 2010 forecasts on Greece are worse, with the deficit seen at 12.2 percent of GDP and national debt rising to 124.9 percent, the highest ratio in the EU.
  
• December 2009 — S&P on Dec. 7 puts the country’s A- sovereign rating on negative watch.
  
•  Fitch Ratings, which had cut Greece to A- when the government revealed the higher deficit, cuts Greek debt to BBB+ with a negative outlook, the first time in 10 years a ratings agency has put Greece below the A investment grade.
•  On Dec. 14, Greece pledges 10 percent cut in social security spending in 2010. 

• Announces overhaul of pension system in six months and new tax system that will make wealthy carry bigger burden.
  
• Dec. 16 S&P cuts Greece’s rating to BBB+ from A
  
• Dec. 19 The German 10-year Bunds widen to an average 272 basis points, the widest in more than eight months
  
•  Dec. 22 – Moody’s cuts Greek debt to A2 from A1, the third agency to downgrade Greece, but still two notches above that of Fitch and S&P.
  
• January 2010 – Greece unveils a stability programme on Jan. 14 saying it will aim to cut its budget gap to 2.8 percent of GDP in 2012 from 12.7 percent in 2009.
  
• February 2010 – Government extends a public sector wage freeze to those making below 2,000 euros a month for 2010, excluding seniority pay hikes.
  
• On Feb. 3 the EU Commission says it backs Greece’s plan to reduce its budget deficit below 3 percent of GDP by 2012 and urges Greece to cut its overall wage bill.
  
• A one-day general strike on Feb. 24 against the austerity measures cripples Greece’s transport and public services.

•  Finance Ministry official anticipate Greece can cut the deficit by about 2 percentage points, short of a 4 percentage point target for 2010. This will mean additional economy measures worth 4.8 billion euros.

• New package of public sector pay cuts and tax increases passed by the government on March 5 to save an extra 4.8 billion euros ($6.5 billion).
  
• The measures include raising VAT by 2 percentage points to 21 percent, cutting public sector salary bonuses by 30 percent, increases in tax on fuel, tobacco and alcohol, as well as freezing state-funded pensions in 2010.

• On March 15, euro zone finance ministers meeting in Brussels agree on a mechanism that will allow them to help Greece financially if needed, but they reveal no details except that it would be without loan guarantees.

source : Reuters

Charts Source : Economist