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Imagine the nation's government has been shut down. Imagine a civil war breaks out
within the country. These are two examples of national crises that American citizens have faced.
Similar to these stressful crises, Greece is facing a dangerous debt which is leading to many
issues for its citizens as well as endangering its part in the European Union. Greece's debt is
credited to its transition to the use of the euro. In transition from the drachma to the euro, the
Greek economy needed to borrow money from the European Union, but Greece does not have
the money to pay it back. The debt crisis in Greece has a negative effect on the European Union
and the citizens of Greece because of the devaluation of property and currency, but can return to
financial stability if they alter taxes on sales and property, limit public spending and increase
public income.
Greek citizens are suffering from the debt crisis through the decreasing price of property.
Helena Smith from The Guardian writes that Greece's property slump is a perfect reflection of its
social and economic crash. Property values through the country have dropped nearly 50% since
the beginning of Greece's economic crisis (Smith). Greece's economic crash is leading to a
decrease in the housing and property market. Due to Greece's debt, all property prices are
plummeting dramatically, causing citizens themselves to lose money because of the devaluation
of their homes during this financial crisis. Before the citizens of Greece lose their financial
stability as well, the Greek government must stabilize their economy by raising their government
income to neutralize the country's debt. Once Greece obtains a greater income, it can use that
money to pay back the loans from the European Union. According to Nikos Konstandaras from
The New York Times, people are refusing their inheritance because of the financial burden their
inherited homes would bring due to the plummeting property values. People are fearing that they
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will be unable to sell their homes and that property taxes will drain their bank accounts
(Konstamdaras). Because of the decline in property value, Greek citizens are becoming poorer;
some are even unable to maintain ownership of their property due to the spiking real estate tax.
With Greek citizens themselves slipping into debt, the economy cannot expect to pay back its
loans if the citizens cannot pay their taxes. The Greek economy must lower the real estate taxes
to allow property owners to regain financial security. This way, the citizens of Greece will have
money to pay back the government to help repay the debt to the European Union.
Greece's debt is leading to the plunging value of the euro and negatively impacting the
European Union. Joseph Micallef from The Huffington Post writes that the European Union has
implemented several different support mechanisms like the European Stability Mechanism, the
European Financial Stability Fund, and other sources of money to provide loans to Greece and
other European countries in debt. The European Union is supporting half of the debt within the
Greek government (Micallef). Although this method of support seems to work now, it will only
be successful if Greece pays back the money which was loaned to them- which is money Greece
currently does not have. If Greece fails to repay this loan, it could lead to an even further
devaluation of the euro and the collapse of the European Union. To gain money to pay back their
loans, Greece must balance out taxes, limit spending on unnecessary expenses, and increase
revenue in areas such as tourism, where Greece receivers over a quarter of its money. Once the
country obtains money from doing these things, it will help stabilize Greece's economy. To
display the dramatic fall in value of currency, "in the last 12 months, the euro has dropped just
over 22 percent," (Menton). This devaluation of the currency has been leading to many financial
issues among not just people of Greece, but people from countries all over Europe. To avoid a
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collapse, Greece borrowed billions of euros from the European Union which are not being paid
back, causing the euro, commonly used through many European countries, to lose value. To
regain value of the currency, the Greek government must wisely reconstruct its tax collections to
properly acquire the money to pay back its loans. If Greece's government increases certain taxes
such as sales tax, it will slowly regain the money it needs to pay back its debt to the European
Union.
The Greek economy should increase its revenue to pay back its loans. According to
Kalyeena Makortoff's research for CNBC, the World Travel and Tourism Council says that
tourism accounts for almost 12 billion euros a year (Makortoff). Greece's tourism industry is
clearly a major contribution to Greece's revenue. By increasing museum, hotel, landmark, and
other tourism-related prices, Greece would increase its revenue. By increasing revenue from one
of its main sources, Greece would have money to pay back the loans from the European Union.
This method is particularly beneficial to the economy because the tourist revenue comes from
people of foreign countries, rather than Greek citizens. Tourism in Europe not only leads to an
increase in money, but an increase in jobs, "while unemployment still remains the highest in the
European Union at just over 22%, a quarter of a million new jobs were reportedly created over
82% of them or 210,000 in the tourism sector," (Pappas). With hundreds of thousands of new
jobs created by the tourist industry, not only is there an increase in revenue from outside of
Greece, but Greek citizens now have more job opportunities to earn income. With rising
employment rates, the Greek government can then raise taxes on Greek citizens with higher
income, bringing in more money to pay back the money Greece owes European Union. The
The debt crisis in Greece is leading to the government's lack of resources and inability to
deal with Syrian refugees. William Drozdiak from Brookings writes that since Greece is the first
point of entry for Syrians, thousands of refugees enter Greece each day to flee the civil war in
Syria, (Drozdiak). Greece, suffering from a major debt crisis and lacking resources, is currently
very incapable of dealing with incoming refugees. If Greece is focused on the flow of refugees
into the country, it will be unable to deal with the major debt crisis at hand. Dealing with the
refugees is also costing Greece money on shelter, food, and other necessities to provide the
Syrians when Greece already has its own crisis to fix. With a more stable economy, Greece
would be able to aid the thousands of refugees entering the country with financial and material
resources. Greece can help the Syrian refugees and provide support if the Greek economy first
focuses on the distribution of taxes and increase in revenue. After paying back the European
Union and freeing themselves from debt, then the Greeks can focus on helping the Syrian
refugees. Liz Alderman from The New York Times explains the unbearable conditions for
refugees in Greece, describing below freezing temperatures and unsecured shelters for refugees,
(Alderman). Without money to save itself, the Greek government simply does not have the
financial resources to help the refugees within its borders. Helping the Syrian refugees is costing
Greece money it does not have. By prioritizing its own financial needs, if the Greek government
focuses on distributing taxes, repaying loans, and balancing the economy, it will then have the
Many people believe that a "Grexit", or Greece leaving the European Union will help
relieve debt, when in reality, it will do more damage to Greece. If Greece was to leave the
European Union:
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Greek corporations and banks will still owe debts denominated in euros, which
it's made in recent years and run a deficit, it will likely have to finance it by
If Greece were to exit the European Union, it would no longer use the euro, and would probably
return to the drachma. Switching currencies is difficult enough, but after the Greek government
would return to its old currency, Greece would still owe money to the European Union in euros.
Printing money would lead to a devaluation of currency, creating only more economic problems
for Greece. With replacing the euro, computers will have to be reprogrammed. Vending
machines will have to be modified. Payment machines will have to be serviced to prevent
motorists from being trapped in subterranean parking garages," (Weissmann). Exiting the
European Union would result in many issues for Greece, especially the many issues caused by
the use of a new currency. Switching back to the drachma causes more complications and only
puts Greece further into debt. Daily dependencies that one might not even notice would be
affected by this would need to be modified, such as vending machines, ATMs, cell phones, and
more. These necessary modifications could potentially lead to even more financial issues from
the beginning of Greece's new identity independent from the European Union.
The continuous debt in Greece is a problem that must end before Greece is unable to
recover from its damages. This Greek crisis has a negative effect on the European Union and the
citizens of Greece because of the devaluation of real estate and the euro, but the Greek economy
can recover by redistributing taxes and balancing incoming revenue. Greece must remain a part
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of the European Union and repay its loans in order to avoid collapse and regain financial
stability.
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Works Cited
Alderman, Liz. "Wintry Blast in Greece Imperils Refugees in Crowded Camps." The New York
Times. The New York Times, 11 Jan. 2017. Web. 15 Mar. 2017.
Drozdiak, William. "Greece's Frightening Inability to Deal with the Refugee Influx | Brookings
Konstandaras, Nikos. "In Greece, Property Is Debt." The New York Times. The New York Times,
Makortoff, Kalyeena. "Acropolis Wow! Greece Hikes Tourist Tickets." CNBC. CNBC, 15 Oct.
Menton, Jessica. "Why Is The Euro Dropping? As Greek Debt Crisis Drags On, The Currency
On Track For Its Biggest Quarterly Decline Ever Against US Dollar." International
Pappas, Gregory. "Increase in Arrivals in Greece Reported for 2016 as Tourism Keeps Greek
Economy Floating; Crete Experiences 10% Increase Over Last Year." The Pappas Post.
Smith, Helena. "Home Ownership in Greece 'a Sick Joke' as Property Market Collapses." The
Guardian. Guardian News and Media, 28 Feb. 2014. Web. 15 Mar. 2017.
Weissmann, Jordan. "Greeces New Bailout Deal Sounds Like Its Destined to Fail." Slate