"Europe must prevent Greece from becoming an out-and-out catastrophe and make sure that the same fiscal 'remedy' is not applied to other weak economies" -- MEP, Franziska Brantner.
The Greek economy has seen a large collapse following the recent worldwide recession. The European Union has expressed concerns for the impact that Greece’s economic collapse will negatively affect other member nations. Greece and the European Union are working to reduce the Greek deficit and to contain the economic crisis to Greece.
In order to be a member of the European Union, an applying nation must first meet the requirements of membership as described in the Copenhagen Criteria. There are geographic, democratic and economic criteria. Geographically, the applying nation must be classified as a European nation, as exemplified by Morocco’s rejection. The applying nation must also have a secure and functional democratic government that only acts in accordance with the law. This means that any citizen should be able participate in the political system and that there are free elections with a secret ballot. The government must also respect human rights and have protection policies for minorities, meaning that a persons’ inalienable rights are protected by law and minority groups can retain their culture and language without discrimination. Economically, a country must have a functional market economy on which it can feasibly support itself and other member nations if need be. The country’s economy needs to be able to compete on a global scale and deal with economic pressures. There are also separate guidelines for countries wanting to convert to the Euro. Finally, countries that want to join must agree to uphold laws and regulations t...
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Greece is the birthplace of today’s most popular form of government: democracy. Greece is also a beautiful country with a very rich culture and traditions, serving as a summer attraction for more than 15 million people every year. Greece’s influence in our daily lives is apparent around the whole world. We find characteristics of Greece’s culture in the literature we study, the buildings we work and live in, the food we eat and the artistic features of our entertainment. However, not even Greece’s bright and honorable past can avoid this brutal crisis that has affected various sectors of the country along with its population. Greece joined the EU in 1981 and two decades later, in 2001, Greece abandoned the Drachma (the old currency) and adopted the Euro. This decision, even today, has been controversial and has been the cause of many discussions and
In 1997, Eurozone rules of Stability Growth Pact has outlined Budgetary Discipline to reduce moral hazard and free riding problem. It required all nations in Eurozone to limit its annual deficit and maintain a stable economic growth. Specially, there isn’t bailout permitted. However, some countries never met the debt rules since the very beginning, while others gradually broke the rules, with incentives to take advantages on the alliances and achieve its own development.【一】8
The European Union has been helped economically ever since World War II. Right after World War II’s end, Europe was struggling to hold on. The countries of the modern-day European Union thought it would be a good idea to come together and help each others struggling economy. To this day, this decision has had a very positive outcome on the EU’s economy. As shown in Diagram 1, the European Union combined together has the world’s highest GDP at 18.3 Trillion USD as compared to the United States’ 17.4 Trillion USD GDP and China’s 10.4 Trillion USD GDP. The idea
There are many variables that lead the current condition of Greece’s economy. It would seem that joining the euro allowed Greece, until 2008, to catch up and even surpass its richer Eurozone partners, but these gains have been completely wiped out in the years since. The adoption of the euro gave Greece the advantage in loan rates as well as low rates on the euro bond market. These actions gave Greece a boost in consumer spending which led to great economic growth. Between the years of 1997 and 2007, Greece had an outcome of an average 4% gain in GDP growth. Greece as well as its other European neighbors was hit with the financial crisis and the resulting economic slowdown took a toll on Greece’s growth rate, which dropped to 2% in 2008. In 2009 the recession hit and the economy contracted by 2.4% as a result of the crisis and its effects on credit, world trade, and domestic consumption which is Greece’s main source of growth. High growth and low interest rates were doing a great job of covering up fiscal issues and structural weaknesses that were made worse by the financial crisis a...
Nevertheless, the problem with the IMF is that they come to the table when the damage is already so far gone that they require such drastic cuts to everything, ensuring that the public cannot sustain its way of living, thereby turning on the government that is trying to fix the problem, who as a result, cuts back on the austerity measures. In Greece’s case, the IMF only added to the debt, each time failing to ignite the Greek economy and in this circumstance, exacerbated the situation. The lack of integrity in hiding their true debt, the Greek government didn’t help matters, as well as national pride of both the Greeks and the Germans, borrower and lender. This tragic saga with the dueling prides, caused the IMF to change its lending rules. “If private creditors are simply paid off with IMF money, there is less incentive for a country to pursue reforms needed to improve its debt profile” (Matthew heller, 2016). In other words, they learned a lesson: lending to a state that doesn’t have control over its currency isn’t always the best course of
The movement of capital from the European core countries like Germany and France to the peripheral countries such as Greece began to subside. In 2010 the Greek Ministry of Finance published the Stability and Growth Program 2010 which listed GDP growth rates, government deficit, government debt level, budget compliance, and statistical credibility as the five main causes of the government-debt crisis plaguing Greece today, (…). The Greek economy was one of the fastest growing in Europe up to the time of the Great Recession. At the time of the original introduction of the euro in the years ranging from 2000 to 2007 the economy grew at around 4.2% annually. Greece faces lots of issues in its attempts to regain control of the crisis and their shattered economy and each year the crisis deepens and the international community keeps a watchful eye on the nation teetering on the edge of
Greece is a country located in Southern Europe and gained its independence from the Ottoman Empire in 1830. In the second half of the 19th century and the first half of the 20th century, more territories and islands were added on. In 1940, Greece was invaded by Italy in World War II, which was also under the power of Germany. The outcome of World War II eventually led to the civil war which was against the supporters of the king and other anti-communist and communist rebels in 1949. Following Greece became a member of lots of agreements. In 2010, the Greece has been in massive debt and is being questioned about their membership as they are creating a strain on the Euro currency.
...act the huge levels of debt in the periphery countries combined with the investment in the housing sector which was hardly hit by the subprime crisis in the US. Therefore, the financial integration and the trends feeding the imbalances in Europe such as government spending and investment in non-tradable sectors rather than increasing the competitiveness of their exports brought and amplified market uncertainty about the sustainability of periphery countries debt. Solutions to this would be a much stronger financial, fiscal and macroeconomic surveillance mechanisms along with common financial rules for the banking sector. However, the most important step as to avoid such divergences among euro zone countries would be to keep a certain level of imbalances but with a Fiscal Union so as to mutualize problems, and apply a market for Eurobonds as a way of burden sharing.
Greece has emerged as one of the fastest growing economies in the EU since the mid-1990s when it has recorded strong GDP growth, significantly outperforming EU averages. Greece was one of the fastest growing countries in the Eurozone with an annual growth rate of 4.3 % from about 2000 to 2007 compared to Eurozone average of 3.1...
European identity, meaning unification or integration of Europe, is associated with the European Union (EU). The EU includes 28 member countries, more than half the European countries have already joined the EU for years and thus the EU unifies Europe. The Eurozone crisis is an ongoing crisis that has been affecting the countries of the Eurozone since early 2009, when a group of 10 central and eastern European banks asked for a bailout. Consequently. The crisis has made it extremely difficult for countries such as Greece to refinance their government debt without the aid of third party such as the European Central Bank (ECB) or the International Monetary Fund. Many may argue that the Eurozone crisis is over. In fact if the Eurozone crisis was really over, then Greece wouldn’t still be requesting for aid as Figure 3 shows increasing debt from 2009 onwards or Spain’s unemployment rate wouldn’t stop rising as Figure 2 shows. Consequently, economic growths have been slow and the sovereign debts have accumulated, making the Eurozone crisis is far from over until economic growth and unemployment is stabilized.
In conclusion, I would assume that the economy crisis in Greek will not end quickly. The worst of Greek economy may probably be over, but the recovery will still need some years. The governments are still attempting to solve the economic crisis and the population are still attempting to seek for work. Greece debt issue and unemployment should start to fall in 2014, and may even have economic growth by the end of 2014. And if the tax dodger would not avoid paying their taxes, the economy condition may recover a lot faster.
Greece is a democratic, high income and developed country from the European continent with the 44th highest GDP and the 29nd highest HDI in the world. According to the International Monetary Fund, Greece’s GDP for fiscal year 2012 was USD 266 billion. The service sector accounts the largest chunk of it at 78% that includes the public and tourism sector. The industrial sector contributes to 18% of Greece’s GDP. Greece’s agricultural sector contributes a mere 4%, as shown in Figure below:
Following the events of the catastrophic 2008 European Financial Crisis, members of the Eurozone began to fear for what they once thought was impossible; the collapse of the Eurozone. After hopes of a speedy recover proved futile, European leaders expected recovery processes to take longer than anticipated. The P.I.G.S. members of the Eurozone, Portugal, Ireland, Greece, and Spain, were hit hardest by the financial crisis, with Greece undoubtedly being in the worst economic condition. Being brought to the brink of collapse, Greece can attribute to its poor economic condition from its reckless deficit spending, poor fiscal policy, and weak state institutions. While many called for “the New Sick Man of Europe” to default on its debt and abandon the euro, Greece made the right decision to remain part of the Eurozone, where leaving would have caused far more severe consequence in the long term.
The Greek crisis is a result of an accumulation of dire policy mistakes. It all began when the previous Greek governments decided not to reveal their debts and deficits in order to fulfill the necessary requirements for the membership of the Eurozone. Furthermore, the government consisted of mass tax evasion as well as corruption. In 2009, the newly elected Greek government decided to expose the real debt and deficits’ figures, which brought much speculative waves regarding the economy. At the moment (since 2010) a number of organizations and countries are providing the Greek state with assistance in regards to alleviating their government debt. International organizations, such as the International Monetary Fund and the European Governing body, the European Union, are undergoing a set of policies designed to assist Greece in its debt crisis. One of the main supporters of the Greek economy is German...
The problems in Europe arose when 10 large Euro-zone banks asked for a bailout from the ECB. Lower confidence in markets led banks to cease capital flows which in turn led to financial strains on periphery governments. This ultimately worsened bank balance sheets and important credit creations, increasing government debts (see figure 3). However with all business cycles, there are booms and busts and it is the ECB’s job to smoothen growth over time. Nevertheless the Euro is hampering the recovery rather than stimulating the economies of various nations, and shows its inability to be a suitable optimum currency. These problems, were brought forth during its conception as the area seems to b...