The European country of Greece has faced serious debt problems recently because it borrowed too much money during prosperous economic times and is now having trouble paying it back. Because Greece is part of the European Union (EU), other EU countries and the International Monetary Fund worked out a debt repayment plan for Greece to keep the EU and its currency, the Euro, from suffering.
As part of that repayment plan, ordinary Greeks are facing higher taxes and major cuts to government jobs as well as fewer social benefits like welfare and health care. Many Greeks have been angered by the how the cuts are being divided among the population and have taken to the streets in protest.
Observers say most ordinary Greeks don't feel responsible for the debt crisis and don't want to believe they had anything to do with it. Other analysts, like Manos Matsaganis of the Athens University of Economics and Business, say the debt has come out of systemic productivity problems in Greece. He says many Greeks, especially government workers who make up about half of the Greek workforce, don't come to work on time, are allowed to retire at age 50 and have, until recently, received generous pensions.
Now, Greek workers are being laid off in large numbers, which was previously unheard of. Many are trying to find new ways to cope, all while navigating a social welfare system that is crumbling around them.
Quotes
"Greeks have grown accustomed to a level of consumption which is Northern European, combined with a business culture that is decidedly Middle Eastern, which is not really feasible, not very productive." - Manos Matsaganis, Athens University of Economics and Business
"There's a misimpression that all of us Greeks have been living large. But if you looked at the small salaries we have been getting, you would see they can't be cut much further." - George Tzaferis, Greek citizen
"All this austerity package implemented by the government and dictated by the European Union and the IMF, it's not as simple as temporary pay cuts, one or two or three years of difficulty. It means like being thrown back into the Stone Age." - Sotiris Panayiotis, Greek citizen
Warm Up Questions
1. Where is Greece?
2. What is the European Union?
3. What is debt?
Discussion Questions
1. One analyst in the video said that a lack of productivity among Greek workers contributed to the debt crisis. How does worker productivity affect a country’s economy?
2. Do you think ordinary Greek people should take responsibility for their country's debt crisis? Why or why not?
3. What do you know about America's national debt? How are the Greek and American debt situations similar? How are they different?
4. One of the commentators in the video says that "We are in a global market of capital and goods. And whoever doesn't understand that doesn't live in a contemporary world." What does he mean by this? How does living in a global market affect countries' relationships with one another?
Additional Resources
Bailout for Greece Raises Stability Concerns Across Europe, U.S.
