Greece

Bankruptcy

Syndicate 10
W F Ridho 29116013
Evyta S. Rosalini 29116066
Rini Hanjani 29116231
Firdaus Maringga 29116202
What Happened?
Greece declared bankrupt by the IMF
because it could not pay its debt in due
date
Chronology
Prior to 2010
Greece join European Union in 2002 in
hope to achieve lower inflation rate and
lower interest rates
Greeces debt has been increasing ever
since, above the average of EU nations
The 2008 international recession hits
Greece so hard
2010
Greece has been on crisis since before 2010, and
despite its crisis Greece sold its government bond with
4x oversubscriber
It its found out that Greece has fraudulent fiscal report
The big 3 credit rating agencies downgraded Greece
bond ranking after its GDP report
After the prior events, Capital market froze and
possibly put Greece in Sovereign default
IMF, European Comission and European Central Bank
(The Troika) giving a bailout to rescue Greece with
condition to implement austerity measures
2011
Withextended recession and poor
implementation, Greeces government
forced to ask for second bailout
2012
The second bailout programme was ratified
in February 2012. A total of240 billionwas
to be transferred in regular tranches through
December 2014. The recession worsened and
the government continued to dither over
bailout program implementation. In
December 2012 the Troika provided Greece
with more debt relief, while the IMF extended
an extra 8.2bn of loans to be transferred
from January 2015 to March 2016.
2014
The fourth review of the bailout programme revealed unexpected
financing gaps.[76][77]In 2014 the outlook for the Greece economy
improved. The government predicted astructural surplusin 2014,
[78][79]opening access to the private lending market to the extent

that its entire financing gap for 2014 was covered via private
bond sales.[80]
Instead a fourth recession started in Q4-2014. [81]The parliament
calledsnap parliamentary election s in December, leading to a
Syriza-led government that rejected the existing bailout terms. [82]
The Troika suspended all scheduled remaining aid to Greece, until
the Greece government retreated or convinced the Troika to accept
a revised programme.[83]This rift caused a liquidity crisis (both for
the Greece government and Greece financial system), plummeting
stock prices at theAthens Stock Exchange and a renewed loss of
access to private financing.
2015
AfterGreece's January snap election, the Troika granted a further
four-month technical extension of its bailout programme
The government unilaterally broke off negotiations on 26 June.
Tsiprasannounced that areferendumwould be held on 5 July to
approve or reject the Troika's 25 June proposal.TheGreece
stock marketclosed on 27 June.
On 5 July a large majorityvotedto reject the bailout terms (a 61%
to 39% decision with 62.5% voter turnout). This caused stock
indexes worldwide to tumble, fearing Greece's potential exit from
the Eurozone
Eurozone leaders reached a provisional agreement on a third
bailout programme, substantially the same as their Junle proposa
Greece Imposed capital control
2016
A newausterity packageto the tune of
5.4 billion euros is passed by the Greece
parliament
The Athens Stock Exchange general
index falls below 500 units for second
time after June 2012
Cause

Tax Evasion
The Greeces citizen and government arent disciplined about tax
payment
Fraudulent Statistic
Greece fiscal report were inconsistent, lead to many revision and far
fetched GDP growth forecast
Government Debt
The bailout werent used to restructure economic, but to repaid its
other loans
Government Deficit
Increase in output outperformed by increase in expenditure
GDP Growth
After 2008 its GDP growth are on the downturn because of 2008
financial crisis
Does Greece already doing the
right thing to get out from its crisis?
According to Colander, there are 3
phase to end financial crisis. The triage
phase, the treatment phase and the
rehabilitation
Triage Phase
In early of its crisis in 2002 until 2008,
Greeces debt were ever increased. It
exacerbated by Greeces unsustainable
economic policy implementation behaviour
Greece first bailout were supposed to be a
measure to dampen the impact so it
wouldnt lead to depression.
The bailout were used to minimizing the
damage caused by the crisis
Treatment Phase
Austerity being the expansioanry fiscal
policy was a condition set up by Troika to
improve the crisis condition
Greeces deficit ended and achieving
surplus in 2014
However after a snap election, the left
wing party reject the bailout and
austerity terms thus making the
treatment phase rendered obsolete
The failure of crisis recovery
phase
Greece stuck in the treatment phase because of political
condition. Expanisonary fiscal policy become unpopular
among citizens because in order to do so, they should cut
government spending and lower tax rate. It means lower
payment and funds for them.
It have little effect since Greeks tax avoidance were high
and government corruption is well known
Greece keeps falling into crisis and its bailout werent used
to restructure its economy
The condition in 2015 couldnt make Greece progress to
Treatment phase
However in 2016, despite of the referendum result to reject
austerity and bailout, EU agreed to bailout Greece
What Should Greeces do
Assuming everything beings equals and has
passed the Triage Phase
With the austerity measure and the bailout,
Greece should entered treatment phase and
improve its economic by lowering tax rate,
enforced tax collection, and create a good
investment climate
At the rehabilitation phase, Greece shouldmake
sure to not make its budget deficit in the future