Euro Zone & the Greek

Debt Crisis
 The Greek Situation :
1. 400 billion $ in debt
2. Debt burden= 170% of annual GDP
3. Politically & economical unstability
4. Widespread unrest & riots.
Concepts : Budgeting
 •Income
Household
•Expenditure

•Income
Country
•Expenditure
Country level :

Income
• Generated by doing work, i.e.,by
providing goods & services
Expenditure
• Done on public demands like health etc.
Exp=in
•Balanced budget

Exp>in
•Unbal. budget
Country Level

 When exp>I , then xtra exp. Generates debt. This debt will
finance the xtra exp. But this debt has to b repaid with some
interest.
 Budgeting : The income,exp.&debt components r decided by
the govt.
 The govt. income comes from the taxation policy that it
imposes on the citizens in order to spend it for public welfare.
 Budget Session : As it is people’s money so any decision
regarding its exp is taken by Parliament in a session called… &
once the budget is passed its implementation becomes the
policy of Govt. called the fiscal policy(Where to spend money &
where to get money from?).
Country level Borrowing

Borrowing &
Bonds
• Inc.-tax,exp.:govt.
Domestic prog.,pension,salary.
• Exp>inc. : Fiscal deficit

• Inc.-export,exp.-import
International • Exp>inc.:Current
account deficit
 When it comes to money, domestic market & international market r 2 seperate entities as in
domestic market the debt can b dealt in INR(Indian Rupee) only over which d govt. has power
& control , whereas in int. mrkt debt is to b repaid in foreign currency from whom U hv taken
money, so U can’t keep a check over their currency + a hi rate of interest is charged.

Debit Credit
Card Card
 The company /bank which issues credit card to u always keeps a check on u whether exp >>>inc or
not. If it is so , then it can :
 Increase interest rate
 Limit the amount of usage
 Cancel ur membership.