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The Greek Crisis Tragedy or Opportunity Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 967 | 654 Words (2 Pages) | Dante Roscini, Jonathan Schlefer, Konstantinos Dimitriou | Harvard Business School : 711088 |
A Word File
A combination of various historical factors contributes to be the sources of Greek crisis. Corrupt political system working in the areas of tax evasion and increasingly promoting bribery continued to make a platform for the Greek crisis. The corrupt political system fed up to weaken the economy due to administrative burdens and dependence on production of few products in-house. The social forces than worked even more in the deterioration of Greece by nationalizing the industries. The Greek crisis was further taken ahead by investing in the public sector and giving high wages and pensions. The public sector was not competent enough to be paid such high wages. These high wages resulted in increased spending. The final part of the Greek crisis was played by the adoption of Euro by Greece. This resulted in an increase in accumulative debts which helped the public sector with its wages and pension. On the other hand since the public sector was not competent enough, so it did no good to help survive the Greek crisis. Thus, the combination of the country's political forces, economic forces and social forces contributed to be the main sources of the Greek crisis and the reason for its economy to deteriorate.
Following questions are answered in this case study solution
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What do you see as the main sources of the Greek crisis?
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Evaluate the domestic and international response to the crisis. Did being in the Euro help or hurt?
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How do you judge the scenarios from here? Can Greece make it?
Case Analysis for The Greek Crisis Tragedy or Opportunity
2. Evaluate the domestic and international response to the crisis. Did being in the Euro help or hurt?
The domestic response to Greek crisis came out as nationalization of specific industries that were potent enough to help boost up the economy. In addition to the industries, banking system was also worked up on to stabilize the economy. Union friendly laws were introduced to protect the employment and index wages. The government took control of the major industries to help back the loans that were leading to increased Greek crisis. The government of Greece increased the tax base installing new tax authorities. The collection of the tax was made computerized to avoid corruption and help make the procedure more systematic. All these domestic efforts helped Greece to join European Union and were then given permission by European Commission in 2000 to join in.
Being in the Euro helped Greece come out of Greek crisis even further. The exchange rate was eliminated after the introduction of the Euro; the interest rate declined. Being part of the Euro also helped in stabilizing the public debt at 100% of the GDP. Inflation was converged to low levels of Euro zone. All in all, the combination of domestic and international response along with being a part of Euro zone helped stabilize the situation and come of the crisis.
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