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The depth of Greece’s depression, in one chart

The current standoff between Greece and the European Union is mostly the result of one big thing: The global financial collapse in 2008 made it impossible for Greece to pay back its national debt, and the European Central Bank refused to help it out. You might not understand why that's true until you understand just how bad the financial crisis was for Greece — which this chart, from Oxford's Max Roser, shows in pretty devastating fashion.

Roser divided Greece into nine classes, sorted by income. The wealthiest ninth of Greeks are listed on the chart as "1st"; the poorest get listed as "9th." Roser then looked at the percentage change in income since 1974 (you'll notice everyone starts at 100 percent in 1974, when the chart begins). What you see is some growth in income across classes up until 2009 — and then a shattering, devastating collapse in everyone's income afterward:

greek income collapse

(Max Roser/Our World in Data)

All that growth in income before the crisis reflects pretty solid economic growth in Greece before the collapse, which is part of how Greece convinced creditors to loan it so much money. But when the global financial crisis hit, creditors reevaluated the wisdom of lending so much money to Greece. Greece's economy collapsed, and incomes fell. That made it hard for Greece to pay its debts, which launched the cycle of austerity budgets that drove Greek incomes even lower.

"Greece is squeezed between a crushing debt burden — 177 percent of GDP, about twice the level in the United States — and a deep depression that makes it difficult to raise the money it needs to make its debt payments," Vox's Dylan Matthews writes. "Any tax hikes or spending cuts enacted to help pay back the debt would just worsen the depression."

So Greece can't pay back its debts, making either a default (which would further wreck Greece's economy) or EU-mandated austerity (which would further wreck Greece's economy) all but inevitable. And in the meantime, Greece's citizens are suffering through an awful depression, making less money than they have in literally decades.

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