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    Euro Crisis

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    Ceasar Cool
    The European debt crisis began in 2009 following the Great Recession. Key countries affected were Greece, Spain, Portugal, Italy and Ireland due to poor fiscal policies. The Eurozone was formed in 1992 when 27 countries adopted the Euro as a unified currency. Greece experienced a budget deficit crisis in 2009 and required bailout loans. The crisis spread as Portugal and Ireland also required bailouts in 2011. Causes included the recession, sovereign debt defaults, lack of coordinated action by the EU, and countries borrowing large sums at low interest rates due to the unified Eurozone currency. Measures taken included austerity programs, long-term loans to Greece, reducing public debt, and preventing bank runs. The crisis highlighted issues with political and economic integration within

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    Euro Crisis

    Uploaded by

    Ceasar Cool
    398 views13 pages
    The European debt crisis began in 2009 following the Great Recession. Key countries affected were Greece, Spain, Portugal, Italy and Ireland due to poor fiscal policies. The Eurozone was formed in 1992 when 27 countries adopted the Euro as a unified currency. Greece experienced a budget deficit crisis in 2009 and required bailout loans. The crisis spread as Portugal and Ireland also required bailouts in 2011. Causes included the recession, sovereign debt defaults, lack of coordinated action by the EU, and countries borrowing large sums at low interest rates due to the unified Eurozone currency. Measures taken included austerity programs, long-term loans to Greece, reducing public debt, and preventing bank runs. The crisis highlighted issues with political and economic integration within

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    The European debt crisis began in 2009 following the Great Recession. Key countries affected were Greece, Spain, Portugal, Italy and Ireland due to poor fiscal policies. The Eurozone was formed in 1992 when 27 countries adopted the Euro as a unified currency. Greece experienced a budget deficit crisis in 2009 and required bailout loans. The crisis spread as Portugal and Ireland also required bailouts in 2011. Causes included the recession, sovereign debt defaults, lack of coordinated action by the EU, and countries borrowing large sums at low interest rates due to the unified Eurozone currency. Measures taken included austerity programs, long-term loans to Greece, reducing public debt, and preventing bank runs. The crisis highlighted issues with political and economic integration within

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    398 views13 pages

    Euro Crisis

    Uploaded by

    Ceasar Cool
    The European debt crisis began in 2009 following the Great Recession. Key countries affected were Greece, Spain, Portugal, Italy and Ireland due to poor fiscal policies. The Eurozone was formed in 1992 when 27 countries adopted the Euro as a unified currency. Greece experienced a budget deficit crisis in 2009 and required bailout loans. The crisis spread as Portugal and Ireland also required bailouts in 2011. Causes included the recession, sovereign debt defaults, lack of coordinated action by the EU, and countries borrowing large sums at low interest rates due to the unified Eurozone currency. Measures taken included austerity programs, long-term loans to Greece, reducing public debt, and preventing bank runs. The crisis highlighted issues with political and economic integration within

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    EURO CRISIS

    Introduction
    ▪ The European debt crisis erupted followed by great
    Recession around 2009.
    ▪ Countries involved in Euro crisis are Greece, Spain,
    Portugal , Italy & Ireland.
    ▪ Euro crisis is a combination of poor fiscal policies by
    governments in Europe.

    2
    HISTORY

    ▪ European union was formed in 1992 between 27


    countries signed the MASTTRICHT TREATY.
    ▪ Euro was adapted in 1999.
    ▪ Euro Central Bank was formed for
    one monetary Unified policy among Euro Area.
    ▪ Lower Exchange rate in exchanging currencies.
    ▪ Ease of doing business was one of the main
    objectives.
    3
    TIMELINE OF EURO DEBT
    CRISIS
    TIMELINE

    European Union was


    formed by 27
    countries signing the Euro was introduced
    Maastricht Treaty to and became the
    avoid trade barriers.​ official currency.​

    1992 1993 1999 2001

    European Central Greece joined.​


    Bank was formed to
    administer the
    monetary policy
    among
    European countries.​
    TIMELINE

    ▪ 2007- Lehman Brothers an investment bank in US collapses and financial


    crisis started to spread.
    ▪ 2008- Financial crisis hits US and Europe.
    ▪ 2009- Greece's budget deficit was revealed to be 13.6 percent of gross
    domestic product(GDP).
    ▪ 2010- Greece asks for a loan and plans to raise taxes and cut spending.
    ▪ EU acts and creates special funds named European Financial Stability
    Facility(EFSF) to provide loans to affected countries.

    6
    TIMELINE

    ▪ Eurozone and IMF agree a 110bn-euro bailout package to


    rescue Greece.

    ▪ 2011- Portugal and Ireland requests for bailout.European


    Commission predicts the economic growth to a "virtual standstill".

    ▪ 2012- Second EU-IMF Bailout for Greece worth 130 billion euros,also
    includes a deal of 53.5 percent debt write down. 25 EU member
    states sign a fiscal compact treaty.

    7
    CAUSES

    8
    Causes

    ▪ Great recession(2008-2012)
    ▪ Sovereign default (unable to
    repay a country's debt)
    ▪ When other countries took
    austerity measures to act
    against recession, European
    Union didn’t act accordingly.

    9
    Causes

    ▪ Economic divergence
    ▪ Fall in Foreign Direct Investment
    ▪ Increase in debt to $ 300 billion.
    ▪ Decline in capital inflows
    affecting stock market
    ▪ Fall in exports

    10
    Measures taken during Eurozone crisis

    ▪ Reducing public debt.


    ▪ Provide long term to Greece
    ▪ Greece government pass austerity law to
    control deficit
    ▪ Prevent bank runs

    12
    CONCLUSION

    ▪ The main reason for the crisis was the found in


    the political economy of monetary integration.
    ▪ The use of a common currency and how it will
    be managed.
    ▪ Countries like Greece borrowed huge money
    because the interest was very low.

    13

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