Countermeasures Against Greece Debt Crisis

Name: Min Chen

Panther: 4212774

Countermeasures Against Greece Debt Crisis

After the eruption of debt crisis in Greek, the Greece government experienced 6 rounds of austerity packages and reforms from February 2010 to December 2010, with the implementation of last round extending to fiscal year 2016. Meanwhile, the Greece government also implemented unprecedented measures in reforming taxation system, fighting against corruption and improving business climate.

The six austerity measures mainly focused on cut-off government expense, such as salary and bonus of government salaries, increase of cooperate and individual income tax, lower pension payment, and delay retirement age etc.. The government privatized and sold properties to rise money. The number of municipalities shall shrink from 1,000 to 400. During the process, some special institutions have been created, such the creation of a financial stability fund and a special agency responsible with exploiting government property, and others.

Many of these measures were offensive to public benefits and received strong public discontent. When the 3rd austerity package was introduced, a nationwide general strike was followed in the next day. Three people were killed, dozens injured and over hundred arrested in the massive protest. However, it was true that some austerity measures were result of overreaction to the debt-crisis and were not necessary, such as high VAT.

As of now, Greek has been witnessed by a prominent recovery from the crisis. Prime Minister Antonis Samaras now starts to talk of the Greek "success story". Investor with assets in Greek now deliver witticism as “Forget Grexit , it could be Greecovery”. However, a stable recovery still takes time for the world to observe the future economy development in Greek.