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Europe Debt Crisis
Transcript of Europe Debt Crisis
term for Europe’s struggle to pay the debts
that has built up in recent decades.
Five of the region’s countries, PIIGS –
have failed to generate enough
economic growth to make their ability
to pay back their debt. What is the European Debt Crisis? PIIGS refers to Portugal, Italy, Ireland, Greece and Spain. The term represent the five most at-risk European economies
during the European Debt Crisis. What are the PIIGS ? The global economy has experienced slow growth since
the U.S. financial crisis of 2008-2009,
which has exposed the unsustainable
policies of countries in Europe.
Greece was one of the first to feel the pinch of weaker growth. When growth slows, so do tax revenues –
making high budget. In truth, Greece’s debts
were so large that they actually
exceed the size of the nation’s entire economy,
and the country could no longer hide the problem. How did the crisis begins? The Eurozone Debt Crisis was the world's greatest economic threat in 2011, and things have only worsened in 2012. The crisis has undergo decay since 2009, when the world first realized Greece couldn't handle its debt. In three years, it's increased rapidly into the potential for government debt defaults from Portugal, Italy, Ireland and Spain. What is the Eurozone Debt Crisis? Many so-called PIIGS countries
were hit hard by
the European Debt Crisis:
Problems Hit PIIGS Countries First, there were no penalties for countries that violated
the debt-to-GDP (Gross Domestic Product) ratios set by the
Europe's founding Maastricht Criteria.
Second, Eurozone countries initially benefited
from the low interest rates and increased investment
capital made possible by the euro's power. How did the Eurozone
get into this crisis? The Greece Debt Crisis is much more than whether the tiny country of Greece will default on its debt. However, like the 2008 collapse of a relatively small investment bank called Lehman Brothers, a Greek default could plunge the world into a financial crisis. This tiny country has triggered the Eurozone Debt Crisis, threatening Europe itself. What is Greece Debt Crisis? Greece Debt Crisis Timeline 1975 2010 2005 1981 2002 2008 2009 2011 2012 Ireland was the first
country in the Europe to officially
enter a recession in 2008 and
eventually is banks were hit
hard by the country's crashing
property market. Ireland Portugal became the third member
of the European to seek a
bailout after realizing slow growth
for a number of years, racking
up debt in the meantime, and coming close to bankruptcy in 2011. Portugal Italy's was hit hard by
the Europe Crisis and saw
its economy shrink nearly
7% over four years. Italy Greece deliberately misreported its economic statistics in order
to keep within the
monetary union guidelines. Greece Spain suffered from a
growing trade and
slow growth throughout
the Europe crisis but managed
to avoid seeking any bailout funds. Spain How Greece affect the Economy? Launch quick-start programs to facilitate business start-ups.
Introduce jobs with lower taxes.
Create special funds and tax benefits to privatize state-owned businesses.
Establish special economic zones, like those in China.
Invest in renewable energy.
Solutions Formerly a monarchy, Greece is replaced by a parliamentary republic. Greece joins the European Union. Greece's credit rating is downgraded. Increased labor strikes, the Greece parliament ends public-sector jobs for life and makes changes to labor laws. General shifts in government economic policy. European Commission President warns Europe member standby to help struggling Greece. Greece earns the lowest credit rating in the world from Standard & Poor's. The drachma is replaced by the Euro. Thanks for your time!