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Some the "schemes" used to solve Latin America Debt Crisis of the 1980s can be use to the current EU Crisis - Essay Example
Author : wolfcoralie
Finance & Accounting
Pages 3 (753 words)
Name: Institution: Task: Date: Some of the "schemes" used to solve Latin America Debt Crisis of the 1980s can be use to the current EU Crisis Countries use a combination of strategies when handling crises. The most common stratagems used are the Baker plan, the Brady plan and the debt forgiveness…
The schemes devised are effective in solving the crisis that is facing the European Union. This is because the challenges of the EU are similar to those affecting countries in Latin America in the eighties. Solving the current EU crisis The Baker plan and the Brady plan can solve the present economic crisis in Europe because they focus on growth of the economy. Countries in Latin America succeeded in solving their debt crisis in 1980s using the two schemes. According to research by economists in Europe, the Brady plan is more effective because it emphasizes on debt reduction. In Mexico, investors’ debts were cleared using the guidelines of the plan (Habermas & Ciaran 107). Interestingly, the Brady plan and the Baker plan are approaches that America use when handling financial crisis for the developing countries. The two plans advocate for sound economic policies when enhancing growth. According to Habermas, & Ciaran (14), the strategy should target least developed economies. The Baker plan identified the countries that needed aid before formulating policies that restructure the economy. This is an indication that European countries should classify their economies before coming up with corrective measures. According to the plan, extending governments should extend the maturity period for loans for countries such as Greece. This will cushion the citizens from crisis. ...