The Economic Crisis in Greece Essays
2887 Words12 Pages
"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.…show more content…
If a nation meets these requirements, it can send in an application for admittance, which is reviewed by the European Council. If the country is unanimously approved for admission, its application is sent to the European Parliament. Parliament must approve of the Council’s decision, and only after that can a country be admitted into the European Union. (http://www.eu-oplysningen.dk/euo_en/spsv/all/24/) Greece applied to the European Union in 1785 hoping for integration as a full member. There were several driving factors for Greece to join the EU. Primarily, Greece wanted to gain stability and power in the region. By using the EU’s institutional framework, Greece could stabilize its government. With a stable government, Greece would be able to gain power in the region. With economic help from the EU, Greece would also be able to reduce its post-war dependence of the United States. Initially, Greece was not integrated as a full member; instead it was given a half-member status for several years while economic reforms were being implemented. While the economic reforms took place, negotiations for full accession were initiated in 1976. The negotiations concluded in 1979. In the same year, the Greek Parliament ratified the accession agreement, and Greece was officially integrated into the European Union in 1981. (http://www.mfa.gr/www.mfa.gr/en-US/European+Policy/Greece+in+the+EU/) Greece was originally given large amounts of money by
Show MoreThe Eurozone Crisis - Causes and Solutions
The so called “Eurozone Crisis” began in 2009 when it became a publicly known that Greece national debt was over 113 % of their GDP. Consequently, Ireland, Portugal, Spain and Italy joined the club with their debt ratio exceeding 100 %. The investors concerned with the level of the sovereign debt, led to increased yield on the bonds of affected countries, which effectively caused the unsustainably deficits in those countries. Although European Union took certain preventive measures by setting up a rescue package, further political disagreements, lack proper planning and compliance with newly established rules, made the problem to grow and continue through 2009-2013. Needless to say, the…show more content…
Furthermore, I will demonstrate several possible solutions and preventive measures to those problems. According to my research, with properly applied austerity measures, improvements in productivity, and further monetary and fiscal integration, the Eurozone will be able to avert future financial crisis among their member states. The table above illustrates different interest rates that investors charged EU member states in between 1995 and 2011.
Historical Aspect of European Economic and Monetary Union (EMU)
The creation of the Eurozone was conceived in 1952 by establishing the European Coal and Steel Council (predecessor of the EU). The purpose of this coalition was to prevent wars between European countries through controlled access to the natural resources (steel and coal) (Gilbert 33). Further political and economic integration took place in 1958 with the treaty of Rome that established ECC (European Common Community) and EURATOM (Atomic energy Commission). The 1988 SMA (Single Market Act) implemented the single market and paved a road to the single monetary policy. It effectively established a common market, where goods and labor force could move freely across borders. Although EC (European Communities) was initially built around six countries (France, Germany, Italy, Luxemburg, Nederland and Belgium) it eventually expanded through several enlargements to 28 member countries. The Maastricht Treaty, 1992 provided blueprints for