We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Economic Crisis in Greece and its Impact on the Euro - Essay Example

Comments (0)
Summary
Economic Crisis in Greece and its Impact on the Euro Introduction: The economic crisis in Greece tends to threaten the country’s position in the European Union. The budget crisis in Greece may misplace its foothold in the nation. Deficit reported by Athens has been found to be four times the limit of the European Union, which implies that Greece could be facing a threat of losing the Euro as its national currency…
Download full paper
GRAB THE BEST PAPER

Extract of sample
Economic Crisis in Greece and its Impact on the Euro

Download file to see previous pages... The levels of debt and shortfalls surpassed the limits that have been set by the euro zone (CNN). As per the Euro is concerned, since its introduction in the year 1999, its value had declined substantially against the US dollar, as well as certain other currencies. The flaw was to a degree credited to outflows of capital from Europe. However, by 2007, the euro was valued at 53 percent higher than its value that was in 2001. The high interest rates in Europe in comparison to US interest rates had triggered the rebound of the euro, and attracted inflow of capital into Europe (Madura, 167). The report conveys a detailed study on the economic crisis prevailing in Greece and its impacts on the Euro. Background to the Crisis: The euro zone was incepted in the year 1999, and several independent states forsaken their own national currencies in support of a universal currency, the euro. The euro was mainly adopted because a number of advantages were expected to get bestowed by the monetary union on the countries that participated. Countries like Greece, which generally have high inflation, the adoption of euro could benefit by lowering the inflation and the nominal interest rates as well. Lower inflation rates encourage greater borrowing and lending, decreases the possibility of competitive devaluations, introduces a common measure of value across countries thus bringing transparency in competition across countries, and also reduces risk by eliminating exchange rate fluctuations. These advantageous features of a common currency subsist till price stability is delivered by the central bank of the monetary union and is plausible. In the case of the euro zone, the European Central Bank had rapidly recognized its anti-inflation recommendations and became credible (Provopoulos, 1-2). In spite of the above mentioned advantages, there are certain costs relevant to the adoption of euro as the common currency. A country joining the euro zone becomes incapable of setting its own domestic economic policy. Also, it no more possesses the ability to alter the nominal exchange rate of its currency. Low financial discrepancies and resilient labor and product markets is particularly important in the euro zone. The euro zone does not have a fundamental economic power that can restructure economic properties from a low-unemployment area to a high-unemployment area to lessen the consequences of unbalanced distress. Also, owing to differences in language and culture among the different countries in Europe, labor is more mobile in the United States than in here. Hence, regulation systems are required for the euro zone at a national level. Lower economic inequity and elastic product and labor markets offer mechanisms to ease the modification to alarms (Provopoulos, 2). The Greek Economy 2001-2009: With the entry into the euro zone, the Greek economy seemed to enter a new period experiencing strong development and low price rises. The changes brought about in the economic environment with the adoption of the euro provided crucial benefits for a country like Greece that had experienced constant budget deficits, and high inflation rates levels from the early-1980s till the mid-1990s. However, along with the advantages, long term ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Greece Economic Crisis of 2011 and its Prospects in the EU as its Member
The Euro Zone is composed of a single monetary market and heterogeneous countries. The Greek crisis signaled a crisis of the entire Euro Zone. Chronological review of the crisis unfolding is demonstrated in the paper. Origins of the crisis lay in the Greek public debt. Politically, an exit by Greece at that time could imply a disaster for the EU.
10 Pages(2500 words)Essay
The reserch paper on The Euro Crisis
The euro crisis has affected as well as threatened the economy of the euro zone and may also adversely affect the future growth of the Euro, the currency of the European countries. In the year 1999, Euro was considered as a single national currency for all the European countries.
16 Pages(4000 words)Essay
What are the roots of the present crisis of the euro
However, behind all of these promises are some limitations that need to be taken into consideration (Provopoulos, 2010). One of the limitations is the substantial loss of the ability of a participating nation to set its individual domestic monetary policy.
3 Pages(750 words)Essay
Influence of Greece Debt Crisis on Overall Balance of Payments in The EU
For the case of Greece crisis of 2009 the European Union had to adjust its monetary policy. The measures had been taken to ensure a balance of payment was balanced. The Greece government had to carry out the reforms needed in conjunction with European monetary union to keep its balance of payment at an equilibrium point.
4 Pages(1000 words)Essay
Financial Crisis in Greece (2010-2013)
The level of government spending increased dramatically after Greece joined the Eurozone and adopted the Euro as its official currency. A generous public sector meant that the government spent increasing amounts on public sector salaries while GDP did not grow in proportion.
7 Pages(1750 words)Essay
The Euro
Indeed, this year, 2012, is the year to either make or break the crisis that has seen economic slowdown in some European states and has made
6 Pages(1500 words)Essay
Implications of Economic crisis on Greece economic
Currently, globalization is a very important aspect of business because of the various opportunities that it avails to businesses globally. Advancement in globalization can be attributed to factors such as advancement in
10 Pages(2500 words)Essay
The implications of the Euro-Zone Crisis and Its Impact on India Economy
Crisis in the economic world do not only affect the member countries but also countries affiliated to them as a channel become closed leading to a crisis in the affiliated country. In this essay we shall be seeking to understand more on the Euro-zone crisis and its
10 Pages(2500 words)Essay
The Euro Zone Economic Crisis
Many nations within the Euro Zone have gotten themselves into a situation in which they cannot pay their debts without the assistance of other nations and organizations such as the IMF and the European Central Bank. The crisis has seen affected nation experience slow economic growth, deflation, a reduced competitiveness in the global market. 
3 Pages(750 words)Article
Choose two neighbouring EU countries, one based within the Euro zone, one based outside the Euro zone: compare and contrast how the countries have fared during the Euro crisis and how they have dealt with it
While Bulgaria is outside the Euro zone, Greece is a part of this zone. Bulgaria has taken many tough steps to regulate and discipline its financial sector, to escape the
9 Pages(2250 words)Essay
Let us find you another Essay on topic Economic Crisis in Greece and its Impact on the Euro for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us