Contemporary management issues - Essay Example

The project would be conducted through a critique of secondary sources on a wide range of topics that relate to the Greek financial crisis. To this end, various authoritative sources would be examined to provide important information about the topic under review. The Greek Financial Crisis Video images of demonstrations and other harsh economic conditions in Greece are not uncommon in the media. Greece has been at the forefront of a major financial situation that can be attributed to their inability to meet the requirements of the European Union (Sladek, 2010).

Many debates and arguments have ensued about the appropriateness of the country continuously remaining as a member of the European Union (Sladek, 2010). However, the rules of the European Union requires that the country discharges its obligations to the European Union and works to meet all the requirements of the Common Market. On the other hand, many Greek citizens are very unhappy about the changes and adjustments that are required. The root of the Greek financial crises can be traced to the fact that the country has maintained a government that carries out uncontrolled spending which leads to high sovereign debts (Pasiouras, 2011).

The European Union requires that member states' governments cut down on subsidies and excessive spending amongst other things (Levy, 2012). However, Greece has a history that goes back to years of running a welfare-state modelled on the principles of Communism (Grawitzky, 2012). This is because from the period before Greece joined the European Union, the nation maintained a system whereby the public sector was the primary engine of the economy. The public sector was the largest controller of resources and the public sector also employed the vast majority of workers in the country (Grawitzky, 2012).

Impact of EU-membership on Greece Greece's membership of the European Union came with several requirements and expectations from the article of membership (Pettifer, 2012). This is because the European Union is built on the elements of supply-side economics which requires the private sector to be the main and primary engine of growth of the economy (Pettifer, 2012). This is connected to the fact that the European Union was formed by nations that were on the Capitalist side of the Cold War. These nations believe in allowing people to work to earn their expectations in life, rather than get the state or government to control resources.

The clash between the European Union and the Greek economy meant that there was an inevitable conflict which would require Greece to dismantle its public-sector oriented economy in favour of a more privatized system. The European Union seeks to create a Single Market that would promote property owning democracy across member states with the hope of promoting efficiency through the principles of Capitalism. Greece joined the Union in 1981 but it has been slow in dismantling its welfare-structured system in favour of a Capitalist model of governance where competition was encouraged (Sladek, 2010).

In spite of these realities, Greece has been repeatedly ruled by parties that are Socialist in outlook (Sladek, 2010). These parties have continued to uphold the welfare-oriented practices of the government and reforms and conformity with EU principles have come rather slowly. Around the year 2005, pressure from the European Union increased and the problems in the Greek public sector was uncovered (Pasiouras, 2011). The country was not able to pay its sovereign debts and the International