In the last two years the severe debt crisis of Greece has posed a large challenge to the member states of the Eurozone. It is threatening the stability of the European Monetary Union (EMU).
After having piled up over 300 Billion Euros of debt, in 2010 the market mistrust in Greece dramatically increased, especially as the newly elected government revealed the incorrectness of the financial statistics of previous years. Finally, on the 23rd of April 2010, Greece was threatened by national bankruptcy and requested help of the other Eurozone members and the International Monetary Fund. Although Greece is one of the smaller economies of the Eurozone , its daring default has great effects on the whole community.
The current debt crisis of Greece suggests that the pre-crisis structure of the EMU bore weak points. To prevent such a debt crisis in future, it is necessary to explore the reasons which led to it and their connection with the EMU structure. This paper analyzes the main reasons and outlines possible improvements by detailed exploration of the Greek crisis.
First Greece’s entrance to the Eurozone will be investigated. After that, the major domestic problems which led to an ongoing deficit will be pointed out and the linkage to insufficient fiscal control will be established. Also the reasons attributed by the Eurozone such as the weak enforcement of the Stability and Growth Pact will be explored. Briefly, the Greek and international approach towards the crisis will be introduced. Before drawing a conclusion a brief summary of the consequences and their effects on the other Eurozone members is held.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Joining the Eurozone
- Budget Deficit and Debt
- Direct Eurozone Reasons
- Greek Approach
- International Approach
- Consequences
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper analyzes the reasons behind the Greek debt crisis and explores possible improvements to prevent similar crises in the future. It investigates the events leading up to the crisis, focusing on Greece's entrance into the Eurozone and the subsequent domestic fiscal problems.
- Greece's entry into the Eurozone and its compliance with the Maastricht Treaty criteria.
- The role of Greece's domestic fiscal policies and structural weaknesses in contributing to the crisis.
- The impact of the Eurozone's structure and the enforcement of the Stability and Growth Pact.
- The responses of both the Greek government and the international community to the crisis.
- The consequences of the crisis for Greece and other Eurozone members.
Zusammenfassung der Kapitel (Chapter Summaries)
The Introduction sets the context of the Greek debt crisis and its implications for the Eurozone. The chapter on Joining the Eurozone examines Greece's accession to the Eurozone, highlighting the discrepancies in reported financial data and the implications for the Eurozone's accession process. The section on Budget Deficit and Debt details the domestic economic problems contributing to the crisis, including excessive government spending and structural issues. The remaining sections, focusing on the Eurozone's role, the Greek and international responses, and the consequences, are omitted to avoid spoilers.
Schlüsselwörter (Keywords)
Greek debt crisis, Eurozone, Maastricht Treaty, Stability and Growth Pact, fiscal deficit, public sector efficiency, economic convergence, monetary union, sovereign debt, European Monetary Union (EMU).
- Quote paper
- Markus Rothenhöfer (Author), 2011, Greek Debt Crisis, Munich, GRIN Verlag, https://www.grin.com/document/182650
