The Risk of Default by PIIGS (Portugal, Ireland, Greece, and Spain)

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The Risk of Default by PIIGS
National default on countries that make up PIIGS is a topic of interest for many reasons. The Term PIIGS refers to the countries of Portugal, Ireland, Greece, and Spain; as these countries are part of a much large economy, the Eurozone, which is comprised of 18 member states. Of these states, PIIGS remains the weakest members to which their financial status give reason for concern moving forward on both the effects of the Eurozone and other world economies. This paper will discuss briefly the background of these states (primarily Greece) and the management of financial records and policies leading up to the crisis. Furthermore, the discussion pertaining to the impacts that PIIGS has on its international partners as well as its member states of the Eurozone. Continually, these financial mishaps or mismanagement leading up to default, give us insight of how other world economies can use this to strengthen their own currencies and provide a stable environment for future investment by foreign governments and corporations. Conclusion of this paper will outline the importance of proper oversight by governments and banks on a global scale. Information for this paper will be provided by various sources which include those of news publications and scholarly documents produced from different educational intuitions and organizations.
Eurozone and PIIGS Background Information
In the scope of world economies, the Eurozone was created in 1999 with an initial 11 member states; the creation has been crucial to the utilization of a single currency across multiple countries. Further adaptation was introduced in allowing for a greater number of members, and today consists of a total of 18 countries across Europe. The following countries make up the Eurozone: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, The Netherlands, Portugal, Slovenia, Slovakia, and Spain. An additional 10 countries are members of the Eurozone but do not utilize the Euro (ECB, 2014).
Greece
At the end of 2009, global financial markets teetered on the brink of collapse; this instability can be directly related to the faltering U.S. housing market. Continually in 2009, as a product of the transnational economic crisis, Greece encountered an unprecedented failure in its economy, as a result, to this was a steep escalation in its unemployment rate. Moreover, investigation into the Greek government has discovered that officials have consistently and intentionally overstated the country's economic statistics resulting in noncompliance of policies that govern financial health (Atrissi & Mezher, 2010).

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