This means that those wealthy countries can exploit and the control the poor countries by opening up the economy to private sectors and investors. Greece is still facing financial crisis even with the help it receives from IMF. Greece struggles to fulfill IMF requirements in order to receive more money, this in turn cripples its economy even more. With budget cut, low wages, high taxes, Greek economy has not been improved ever since the recession hit. Whether IMF has a good intention to help Greece gets back on its feet or not, Greece continues to make difficult decisions to help rebuild its fragile economy.
The question to be posed is: Why was being part of the Eurozone so detrimental to the Greek economy and how the UK avoided these issues by using the Great Britain Pound and relying on itself? This question will explain why the unemployment levels in Greece are so much higher than that of the UK and why this is because of the Eurozone. The problem with Greece is that the country brought this all upon themselves, and many look at Greece, as the reason for the Eurozone crisis in general. The country mismanaged the economy so poorly and relied way to heavily on borrowing against the market, after the initial recession hit. This led to Greece having to borrow money from the European Union and the International Monetary fund in order to keep their economy functioning.
The spread of this crisis to other EU countries such as Ireland resulted in a further indebted Europe, and a difficult situation to recover from. The emergency measures which inevitably were required to take place in turn resulted in the lowering of the country’s debt, but meant that these countries became dependent on organizations such as the European Financial Stability Facility and the International Monetary Fund. This bailout will likely lead to more draconian measures taking place, and many EU countries losing control of its own finances. The future of the euro is at stake, and so is the dignity and prosperity of some of the world’s most formally praised nations. .
As the Greek domestic policies began to take a toll on its economy, the EU broke its own treaty to help them out. However, this fight to help Greece out would tear the European Community apart, but not destroy it. The domestic policies that Greece put into place before and while in the EU have only exacerbated the difficulty of international cooperation. Greece’s inability to control its government spending has drastically hurt the euro. For example, right before its financial collapse Greece’s spending was on par with many European nations.
For example, a majority of Germans wants Greece to out of the EU unless Greece is able to reform quickly, because of recent tension between German and Greece. Richer European states, especially German, are not quite happy to use their taxes to bailouts of Greece’s economic crisis since it is mainly caused by Greece’s political corruption; on the other hand, according to New York Times, Greece has also had hard time to adjust and assimilate the common European identity because its identity was originated from the eastern Balkan identity that makes huge gap from western European identities.
How Greece’s problems started- The big problem for Greece is that it is a very corrupt country politically. It’s corrupted both domestically and foreign where large amounts of funding money is being placed in the wrong hands. And 25% of the country 's GDP is falling into undeclared black markets. The severe parts of “The Greek Depression” started in 2009 where fears developed about them not being able to pay their debt obligations due to data that was misinterpreted by the Greek government a while back. Also there is a large in balance in the public sector has created a vastly large expense for the private sector, further contributing to its debt problem.
Obviously, vulnerability of one of the Eurozone countries leads directly to the weakness of the whole currency union. Therefore, coherence of fiscal policies within the Eurozone is necessary. Speaking of the outcomes of the Great Recession regarding Spain and Greece, we should underline, that the crisis has demonstrated the fragility of both countries’ growth models after their changeover to the Euro. Similar scenario for Spain and Greece, which culminated in loss of economic competitiveness and rapidly increasing government debt, testifies to the fact that Spain and Euro have rather lost than won from joining the Eurozone.
but the unemployment was not equally shared between the different groups of people (the largest differences occurred due to the sex, education, age, etc.) but at the end these measures only delayed the process of significant labor unemployment, it didn’t help the situation go back to how it used to be before the crisis. The labor force of a population is involved with the people who are employed and unemployed. The Inte... ... middle of paper ... ... face many problems, the European labor market was affected by this crisis as well, and there were many other problems that were faced during this hard period. The EU’s plans for the future are to minimize the job losses and prevent unemployment, improve job creation, and to recover the economy in a full and stable way.
In a sense, fiscal austerity or an exit scenario is the alternative to accepting differentiated government bond yields within the Eurozone. If Greece does not leave Euro currency by accepting higher bond yields, then high interest will decrease demand, raise savings and slow the economy.  The other option, an exit scenario of Germany, also causes problems for the country’s economy. As a result of loss of purchasing power in the periphery economies and additional transaction costs, German exports to these countries will decrease. Also a stronger Euro will reduce competitiveness of German exports against the rest of the world.
Defaulting of debts might also be as a result of the instability of the currency v... ... middle of paper ... ...nia. This therefore meant that Greece was considered an economically crippled state due to the huge debt. These debts were also irreparable considering their economic situation. The Greece budget was also found to be worse than expected; this is according to the Eurostat. The inability of Greece to control the economic crisis also contributed to the bonds being downgraded further (Hubpages 2011).