...Topic: PIIGS (European debt crisis) 吳宇綸D0131292 劉昱顯D0131156 王謙 周雋彥D0125599 Contents 1. Introduction 2. Overview of the European sovereign debt problem 3. Relief measures of the European sovereign debt crisis 4. European debt crisis 5. Conclusion 6. References I. Introduction The PIIGS is a group that composed of five countries that have some commonality in location and economic environments. In this case, PIIGS includes Portugal, Italy, Ireland, Greece and Spain. The countries which be mentioned are all part of European Union members and have been noted for having weak economics and bad situation of financial problems. In 2008, economic crisis came to all over the world, during the worldwide economic crisis, Portugal, Italy, Ireland, Greece and Spain began to come out the grave and serious concern in the European Union refer to the enormous amount of sovereign debt that they were carrying. The problem with the PIIGS is that speculators dropped, compounding their debt issues and the situation might be much more worse. Many European Union members were also unwilling to rescue these struggling nations although when it became very clear that assistance would be needed. The sovereign debt crisis sparked a number of conversations about reforming financial policy in the European Union to prevent similar problems in the future. The members of PIIGS felt displeasure at the negative allusions and some have...
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...retail payment service, PayLater. In 2012 Wonga.com reporter a net benefit of £62.5m, former Wonga Business applied to have the trading name Everline added to its credit licence in September this year the domain name Everline.com was registered by WDFC SA. Everline, former Wonga for Business, was launched in May 2012, and offers £3,000 to £50,000 loans to limited companies, LTD’s, or partnerships, and £10,000 to trade solders; money can be borrowed between one and fifty two weeks and the business have to been trading for at least two years. Methodology research The compiled information for adobe PESTEL analysis is done through literature research on official Spanish government bodies, official Spanish government website, newspapers, blogs, EU websites and traditional literature. In order to keep the data up to date all the numbers shown in the PESTEL are being contrasted with the most...
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...Throughout the development of the globalized economy, the EU has become a very attractive market for many companies around the world as producing and selling products in the EU becomes more popular. The EU has developed different competition policies in order to review, prevent or prosecute any anti-competitive behaviour and to protect the customer’s welfare. The challenge the EU now faces is how to achieve healthy competition and maintain customer welfare without derogating the free market. In the following, I will give an overview of the instruments which the EU uses to do so. It is stated in the Report on Competition Policy 2008 that “cartels are amongst the most serious violation of competition law”. Cartels have a profound negative impact on competition, pricing and innovation because they shield their participants from external competition, which allows them to raise prices, divide the market or limit production, which in turn can harm the consumer’s freedom of choice. Hence, companies have to pay high fines when the EU uncovers their cartels. Another problem the EU has to deal with is the monopolising positions of some firms. The abuse of such a position influences free competition and affects the consumer’s choice. Monopolists often try to create an unattractive market for competitors i.e. through dumping. A recent example of abuse of a monopolising position was the Microsoft case from 2007. During this case, the Commission made “a decision concluding that Microsoft...
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...global financial crisis begins, but the global recession endures, some point to the threat of a second wave of the crisis: sovereign debt crises. Greece is currently facing a classic sovereign debt crisis. Greece accumulated high levels of debt during the decade before the crisis, when capital markets were highly liquid. As the crisis has unfolded, and capital markets have become more illiquid, Greece may no longer be able to roll over its maturing debt obligations. Some analysts have discussed the possibility of a Greek default. To avoid such a default, however, the Greek government has introduced a variety of austerity measures and, on April 23, 2010, formally requested financial assistance from the other 15 European Union (EU) member states that use the euro as their national currency (the Euro zone) and the International Monetary Fund (IMF).Greece’s debt crisis has raised a host of questions about the merits of the euro and the prospects for future European integration, with some calling for more integration and others less. Some have also pointed to possible problems associated with a common monetary policy but diverse national fiscal policies. This report provides an overview of the crisis; outlines the major causes of the crisis, focusing on both domestic and international factors; examines how Greece, the Eurozone members, and the IMF have responded to the crisis; and highlights the broader implications of Greece’s debt crisis, . Greece’s Debt Crisis: Background Build-Up...
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... then Spain and Cyprus emerged as a "burden" in these economic problems. Another emerging issue is productivity, border policy, and the exchange rate that makes this organization stability unsteady. Another issue that emerged is the exclusivity of the organization. Another issues arising from the exclusivity of membership expansion problem. Preceded by the six founding countries, EU has 28 members now, as Croatia joined on 1st July 2013. The membership number is certain to grow rapidly with the number of countries that volunteered to become a member. Regardless of all the problems it faces today, the EU is still believed to be an organization that brings positive impact to its members. States' desire to be able to join the candidate can not be separated from the success tale of the European Union, particularly in the fields of economics and politics. EU membership process is not easy, the European Union was known to be selective in accepting new membership countries. The candidates must meet the requirements set forth by EU and also each member state countries without exception must approve the EU membership candidate. This process is considered too restrictive and difficult for candidates to get a...
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...Euro Crisis: Greece’s Reform to Uphold the Euro Greece has been a significant trading partner within the EU as well with the global community at large. Public spending has been at its highest since the financial crisis in 2008 and with irrational investing behind banks and the private sectors; it only worsened their economy. The complicated areas of the European economy mostly have been due to countries spending vast amounts of borrowed finances than they have fluctuating within their own nation. Countries deficits are still increasing after the US financial crisis and it has led to continuous austerity agreements and negotiations to prevent these issues from relapsing. Greece is in a classic sovereign debt crisis and while struggling to fix their deficit, (currently the largest in the Eurozone) this turned to controversial debates whether or not to let Greece free of the euro, or continue to keep them in. The problem of the matter relies heavily on the political sector of the union as well as the economic foundation represented in Greece’s past, showing that releasing the nation from the euro will only cause more harm than actually stabilizing them in. The US financial crisis of 2008 grew strongly towards the inefficiency between the banks and investors, who failed to act rational in accordance with the economy (Heath 401). In an efficient market, one person’s gains are another person’s loss but one cannot strategize placement in the market through someone making continuous...
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...past decade. The country’s economic and political situation has reached crisis level thus propelling it into the global lime-light, dominating headlines in print and electronic media. This essay seeks to explain the crisis and explore the implications for Greece, the European Union and the international political economy, should continued assistance not forthcoming. The source of Creek’s debt crisis is both domestic and international. Domestically, analysts point to high government spending, weak revenue collection, and structural rigidities in the economy. This affected the state’s ability to fund government budget and current account deficits, resulting in profound borrowing. As the situation progressed for the worst, the Creek economy relied heavily on international capital markets, which only aided in making the country extremely vulnerable to any shifts in investor confidence. Access to capital at low interest rates after adopting the euro, and weak enforcement of European Union (EU) rules concerning debt and deficit ceilings facilitated Greece’s accumulating high levels of external debt. In October 2009 investors became jittery due to the actions of the newly elected government in revising the estimate of the government budget deficit for 2009 from 6.7% of gross domestic product (GDP) to 12.7% of GDP (Nelson et al., 2010). A few months later, however, in April 2010, Eurostat, the European Union (EU)’s statistical agency, estimated Greece’s deficit to be even higher, at...
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...Brazil Brazil is the largest and most populous nation in South America with a total surface of about 8.514.200 km² (covered by one-third of rainforest) and a population of approximately 192,273,000 inhabitants. The following table illustrates Brazil’s import and export figures which help to get a concret overview of its world trade: |Brazil | | |GDP – Composition by sector (2008) |Agriculture: 5.5% | | |Industry/Manufacturing: 28.5% | | |Services: 66% | |Total export (in % of total GDP) |6.7% (1990), 9.1% (2000), 11.2% (2007), 13% (2008), 10.2% (2009) | |Total import (in % of total GDP) |4.8% (1990), 9.8% (2000), 8.6% (2007), 11% (2008), 9.7% (2009) | |Most important products of export (in % of |Manufactured products 44.1% (automotive parts, civilian aircrafts etc.), crude oil (29.2%), Coffee | |total export) (2009) |(20%), Soybeans (39% of world soybean exports; market leader; N...
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...24 Office Ext: 236, 269 Course Overview/objective: There are new realities that are critical for today’s students to embrace with the remarkable changes that are taking place in the cross border flow of products, services, capital, technology and people. Today both the volume of international trade and the level of firms’ internationalization are increasing at a fast pace creating newer opportunities and challenges for business. With this fact in mind, this course has been designed to prepare the future managers to grasp and comprehend the economic forces behind international business operations (as for instance -why does international trade take place? or why do firms invest overseas?) and the economic consequences of such operations( as for instance effect of international trade on production and consumption or effect of international trade on exchange rates. The contents of the course will familiarize the students with various fundamentals of international economics theory and also understand the linkages between these economic concepts and their implications for business. (As for instance the creation of a regional trade block and its implications for various sectors of business in the integrating countries) One of the premises for a successful international business is the proper choice of countries. With the aim of creating a basic understanding of business environment in some major economies as US ,EU and China ,the course also deals with the question...
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...Discuss and analysis the movements in value of the Euro against the pound since January 2008 Introduction The value of Euro varies with time by a floating exchange rate against British Pound (GBP). Hence, the exchange rate influenced the value of Euro against GBP and law of one price is assumed. Theories such as the relative Purchasing Power Parity and the fisher effect illustrate the impact of the inflation and the interest rate between two countries on the value of the currency. The asset market model is also another instrument to analyse the movement of a currency. The constraints of using these models are those theories all assumed perfect efficiency of market and the increasing role of global capital flows is ignored. Therefore they are relatively useful to predict the rates in the future which are demonstrated in part two. The following analysis is based on economic factors such as the economic status of the Euro area and the United Kingdom (UK) and the decision made by the Bank of England (BoE) and the European Central Bank (ECB). The investor confidence (Market Psychology) is also below. They affect the value of euro significant, as they vary the supply of and demand for Euro. The value of Euro against British Pound (GBP) increased throughout the three years. The Euro rose from 0.7416 to 0.8507 over the three decades. Euro was 0.7416 at the beginning of 2008, which was its weakest point in these three years. Moreover, the strongest point of Euro relative to GBP is...
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...Foreign Investment Opportunities in Cyprus Author: <Student> Report Date: 10/4/2013 Executive Overview: Foreword: New business investment recommendations in this report are based on medium - longer term opportunities (2 – 10 years) on the assumption that the current economic and political crisis affecting the general business and banking environment with restrictions on the free flow of capital funds into and out of Cyprus, make it impractical to execute any short term investments in this country. The short term economic outlook looks uncertain and highly volatile. Cyprus faces an extremely challenging period requiring a major restructuring of its financial services industry. Whilst in theory, the Cypriot Banking industry’s exposure to Greek government debt has been factored into the existing EU bailout calculations, any further crisis in the Greek economy and potential for foreign deposits with drawls once the current capital transfer controls (blocks) are lifted, could lead to a new crisis in the Cypriot Banking sector which could require additional EU intervention and a further period of uncertainty and economic instability. The overall effect on its economy of the current Troika ((EU, ECB, IMF) bailout conditions is yet to be felt. Future GDP short term projections vary; the IMF and EU is talking optimistically of a fall of between 5 -10% , other analysts predicts falls as great as 15% this year and another 5% in 2014 with unemployment ranging from 13.7% this...
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... Georgi Kamburov georgikamburov_92@abv.bg INT305- Overview of the European Union Dragomir Stoyanov Research Paper Feb.6, 2012 "Europe 2020" is a 10-year strategy proposed by the European Commission on March 3, 2010 and it is a plan for reviving the economy of the European Union. "Europe 2020" is a multifaceted strategy for sustainable growth and workplaces for the next decade, aiming to help Europe to emerge stronger, from its worst economic crisis dating from the 30s of the twentieth century till now. On January 15, 2010 officially ended the consultation and discussion of the draft new EU strategy: More than 1,500 suggestions were made by various interested parties: Member States, regions, business and professional associations, NGOs and scientific organizations, non-EU countries and international organizations. Overall, the proposed strategy and its priorities meet universal approval with the recommendation, to avoid the mistakes of the Lisbon Strategy and, if it is possible, this one to be more specific and more strictly applied. On March 3, 2010 President Barroso presented his proposal for...
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...over the past few decades. Recession has added importance to the discretionary fiscal policy because monetary policy and automatic stabilizers could not pull back the economy from recession on their own. The case of EU countries is of great significance in times of recession because of certain common policies which the member states have to follow. The research is theoretical in nature synthesizing previously done studies in the same field. Fiscal policy in Germany and Greece during the recession in 2008-2009 is being analyzed to come up with the better policy measure. TABLE OF CONTENTS Abstract……………………………………………………………………………….3 TABLE OF CONTENTS………………………………………………………….….4 1.INTRODUCTION ………………………………………………….………………5 2. OVERVIEW………………………………………………………….…………….9 3. RECESSION IN EUROPE 2008-2009…………………………………………..11 3.1. Recession in Greece………………………………………...…………...…..13 3.2. Recession in Germany……………………………………...…………...…..17 4. EU FISCAL POLICY………………………………………………………....….20 5. POLICY TOOLS………………………………………………………………….23 6. FISCAL POLICY IMPLICATIONS …………………………………………….25 6.1 Greece ………………………………………………………………………..25 6.1.1 Pre Crisis Economic Condition …………………………………..…….25 6.2.2 Recession 2008-2009 ………………………………………….……….26 6.1.3 Addressing the Recession: The post Crisis Period……………………27 6.2 Germany…..………………………………………………………………….28 6.2.1 Post Crises Economy and Recession 2008-09…………………..……28 6.2.2 Post Crises Germany ……………………………………..…………….29 6.2.3. Suggestions …………………………………………………...
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...IN EUROPEAN UNION IN TIMES OF CRISIS – CHARACTERISTICS AND EVOLUTIONS ORĂȘTEAN Ramona Lucian Blaga University of Sibiu, Romania Abstract: This paper focuses on the lending arrangements of the IMF in EU countries during crisis period. First, we reviewed the literature regarding IMF-supported programs in times of crisis. On the other hand, we provided a description of the IMF arrangements in EU countries in 2008-2013. We found that these programs differ in type, duration, amount and conditionality, but not significantly in their key objectives (achieving sustainable public finances and ensuring financial sector stability). Key words: IMF lending arrangements, EU countries, crisis 1. IMF – supported programs in times of crisis – a literature review Some authors examine the role of the IMF as crisis manager and crisis lender (Boughton, 2000; Chandavarkar, 2002), the role played by the IMF as a creditor and as a monitor of economic reforms (Marchesi and Sabani, 2007) or the efficacy of IMF's finance in preventing financial crises (Brandes and Schule, 2008). Many articles have been written on the role of the IMF in financing and designing economic reform programs for developing countries and in dealing with crisis periods, thus: - the IMF's role in dealing with the Asian crisis in Thailand, Indonesia and South Korea in 1997-1998 (Jonas, 1999; Ito, 2007); - the IMF-supported program in Indonesia during the crisis period (Boediono, 2002; Grenville...
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...E SSAY COLLECT ION Crisis in the Eurozone Transatlantic Perspectives ESSAY COLLECTION Crisis in the Eurozone Transatlantic Perspectives This publication is a part of CFR’s International Institutions and Global Governance (IIGG) program and has been made possible by the generous support of the Robina Foundation. The Council on Foreign Relations (CFR) is an independent, nonpartisan membership organization, think tank, and publisher dedicated to being a resource for its members, government officials, business executives, journalists, educators and students, civic and religious leaders, and other interested citizens in order to help them better understand the world and the foreign policy choices facing the United States and other countries. Founded in 1921, CFR carries out its mission by maintaining a diverse membership, with special programs to promote interest and develop expertise in the next generation of foreign policy leaders; convening meetings at its headquarters in New York and in Washington, DC, and other cities where senior government officials, members of Congress, global leaders, and prominent thinkers come together with CFR members to discuss and debate major international issues; supporting a Studies Program that fosters independent research, enabling CFR scholars to produce articles, reports, and books and hold roundtables that analyze foreign policy issues and make concrete policy recommendations; publishing Foreign Affairs, the preeminent journal...
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