8 “Is Greece Heading for Default?,” Oxford Economics, January 29, 2010. 9 “Q&A: Greece's financial crisis explained,”http://edition.cnn.com/2010/BUSINESS/02/10/greek.debt.qanda/index.html 10 Congressional Research Service. “CRS Report, Greece’s Debt Crisis: Overview, Policy Responses, and Implications,” April 27, 2010.
previously released by the Greek government in October 2009. This further increased investor nervousness and revived questions about Greece’s ability to repay its debts.11 Greece’s debt is estimated at 300 billion euros with part of it maturing in mid-May 2010. Despite austerity measures and sales of additional Greek bonds, fears of a possible default continued to spread along with speculations on other courses of action the Greeks may take. Greece: Current Economic State Between 2000 and 2007, the Greek economy grew as GDP increased by about 4.0% per year. However, the growth dropped to 2% in 2008 and contracted by 2% in 2009, bringing the country into recession. This decline may be attributed to the global financial crisis and Greece’s failure to address the fiscal problems. Unemployment rose to 9.5% in 2009 from 7.7% of the previous year. On the other hand, inflation went down by nearly 3 percentage points. Price levels show an uptrend since 2003, almost reaching the EU average in 2009. With Greece taking a step towards comprehensive structural reforms to address its current debt crisis and restore competitiveness, the Organisation for Economic