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PERSONAL

EFFECTIVENESS
LAB
< Before one to could even think of the end of great
recession of 2008, Greece gave birth to another
crisis.
< Greece debt crisis is actually an evolution of the
global crisis.
< Greece allowed deficits from Central bank and
government bonds to pile up.
< Greece debt came to light in 2009.
< $overeignty
N having supreme independent authority over a territory
N supreme law making authority
< ebt
N ebt is that which is owed
N Moral obligation not requiring money
< Crisis
N hen the debt level increases to a level that it cant be
repaid
N This can even lead to lower economic growth and
worsen the situation of the economy in terms of
recession.
< $overeign debt crisis is a situation wherein a
country with a powerful higher authority enters the
state of not being able to repay its debts and
obligations.
< This leads to higher fiscal deficit of the economy
and lower growth.
< t is an economic and monetary union of 16 European
union members.
< Adopted EURO currency as their sole legal tender.
< The European CentraI Bank ECB is the institution of
the European Union EU tasked with administrating the
monetary policy of the 16 EU member states taking part
in the Euro zone.
< Members-
AU$TRA,BELGUM,CYPRU$,FLA,FRACE,G
ERMAY,GREECE,RELA,LUXEMBOURG,
MALTA,ETHERLA$,PORTUGAL,$LOVAKA,
$PA,$LOVEA.
< Maintain stability and prevent crisis in
international monetary system.
< Provides advice to its 184 member countries
and raising their living standards.
< $erve as a forum where they discuss national,
regional and global consequences.
< Temporarily financing its members countries to
assist them.
< Established in 1993.
< Currently has 27 members.
< Committed to regional integration.
< Ensures the free movement of goods,
services, people and capital in all member
states.
< Greece is a developed economy with high standards of
living.
< t has high human development index and high purchasing
power.
< n 2009 Greece was ranked second lowest on EU's index
of economic freedom.
< Country suffers from high level corruption.
< Economic growth turned negative in 2009 for the first time
since 1993.
< The European debt crisis came into limelight with Greece.
< This was done by the new government who took charge
after the general elections.
< $hocking role of Goldman $achs in the fraud.
< ew government revealed the facts which actually
happened in which the previous government had overspent
and also reported a debt which ballooned to 12.7% of the
GP.
< The main issue of government is debt refinancing.
< t had total sovereign debt of Euro 254bn and out
of which Euro 50bn needs to refinanced in 2010.
< Recent efforts to raise money through sale of
bonds also failed as amount raised is too less then
required.
< f the situation is such Greece must declare itself
insolvent.
< Greece has highest budget deficit of 13.6% of
GP or euro32.4bnas of April 2010.
< Budget deficit- Highest in the world.
< ebt to GP ratio- 113% as of nov.2009.
< ebt-GP ratio 2
nd
highest in EU.
< ebt of euro 216bn as on January 2010.
< Greece was in urgent requirement of funds and on
April 23
rd
it approached MF and EUROZOE'$
assistance in form of Bailout package.
< Condition for funds from MF was that the economy
must implement usterity measures.
< EU & MF agreed to 110bn Euros 80bn Euros from
EU & 30bn Euros from MF.
< Public protest in Greece due to implementation of
austerity measures.
< Protests and pressure from other European nations
mainly Germany4.6% in EU because the debt load is
hitting the mark of 121% of GP.
< owngrading of Greece bonds to "junk status¨ BY
$&P.
< $tock markets plummeted.
< $hort term borrowing rates had hit levels of 38%
< Yield premium widens owing to increased cost of
borrowing for Greece.
< epreciation of currency.
< Germany, the largest euro member, because of
the feeling that it could lead to worsening of
situation to the other Europe nations.
< MF by funding the bailout package.
< EU for providing $PECAL PURPO$E
VEHCLE$$PV of euro 440bn + 60bnfor
emergencies.
< Failure of Greek financial system will benefit the
U$ treasuries.
< Help U$ to correct its own financials.
< Greek govt. targets public debt to a limit of 60%
and deficit to 3%
< Greece announces increase in taxes and
spending cuts to control deficit.
< EURO countries will fund Greece with terms set
by ECB.
< MF can provide more funds, if at all required.
< CONTRIBUTORS:
Piyush $achdeva
Harshini Rajendran
Anchal $ingh
eha $oni
Rajdeep
Chakresh Mittal
Amit Mittal

<

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