Greek economic crisis
In September 2009, Greek economic crisis exploded. Greek government announced that the country’s financial deficits and public debt to gross domestic product would be along about 12.7% and 113%, which are far from the provision of European Union: 3% financial deficit and less than 60% public debt to gross domestic product. Moody’s, S&P and Fitch, the three major credit-rating agencies, all reduced the credit-rating of Greece. The direct cause of this crisis is government’s massive deficits. However, besides Greece, there are other European countries also belonging to European Union; face a similar problem, such as Portugal, Ireland, Italy and Spain. Therefore, Greece’s debt crisis also triggers a European crisis. As the three companies lowered Greece’s credit rating the cost of their debt was on an upward trend. Consequently, Greece initiated an austerity program, the austerity measure resulted mass demonstrations. Background
It all started in 2001, when Greece joined the European Union, Greece’s deficit at the time was higher than 3%, the standard of European Union. An American company named Goldman Sachs “helped Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.”(http://translate.google.com/?sl=en#en/zh-CN/) In comparison to other EU countries, Greece’s economic situation was relatively weak. Tourism being the main source of income for Greece was affected by the global economic crisis in 2007 which reduced the number of tourists form all over the world. This had a strong impact on Greece, as their imports were higher than exports; it caused the outflow of capital. Other factors that added to their crisis were high...