Some the "schemes" used to solve Latin America Debt Crisis of the 1980s can be use to the current EU Crisis

Some the "schemes" used to solve Latin America Debt Crisis of the 1980s can be use to the current EU Crisis Essay example
Ph.D.
Essay
Finance & Accounting
Pages 3 (753 words)
Download 0
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…

Introduction

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. ...
Download paper
Not exactly what you need?

Related papers

The European Debt Crisis
The crisis accentuated the economic interdependence of the EU, as it highlighted the deficiency in the Eurozone’s political integration which was vital for the provision of a well-harmonized and effectual financial response. To ease the debt crisis and improve economic status, EU’s richest members encouraged the most highly indebted EU members to cut down on government expenditures and…
European Sovereign-debt Crisis
Attempts by international monetary fund (IMF) to avail 750 billion Euros to financially support countries with high debt situation did not mitigate the situation. The paper will, therefore, explore on the causes and evolution of the debt crisis, its impact on the US market, and some interventions undertaken by the US to mitigate the impact. Causes of the Crisis Many factors can be attributed to…
European Debt Crisis
According to Investopedia (2012) the crisis led to the reduction of the confidence of the market for European businesses and economies. In contrast, according to the version of Constancio (2012), the European sovereign debt crisis emerged only in spring 2010. The European sovereign debt crisis is the climax of the banking crisis resulting from the demise of the Lehman Brothers and the resulting…
The European Sovereign Debt Crisis
In the year 2001, Greece joined the EU (Schafer, 1). Greece had to pay a return rate that was higher than the fiscal market. Originally it had to decrease its debt to obtain a standard rate of fiscal debit in order to join the EU. After a while, the deficit rate became enormous, thus, leading to the rise of the sovereign debt crisis in the year 2009. Therefore, it is arguable to state that is the…
Examine the new policies proposed to solve the financial and sovereign debt crisis in Europe. Your report should include a brief
Understanding complex economic relationship in layman’s view point will be the crux of this essay. In the third part, the study will analyze proposed solution for resolving sovereign debt crisis in terms of advantages and disadvantages for countries with high credit ratings. In the last section, the essay will summarize the personal view of the researcher on sovereign debt crisis. Table of…
Current International Debt Crisis (Greece Crisis)
The countries had fallen into a debt trap and there was problem of cash crunch and liquidity crisis in the banking sector. Thus the Euro zone faced both fiscal and monetary policy problems along with a slowdown of the economies. The main reason behind this is the common monetary policy that these countries have owning to the adoption of the Euro currency across the entire zone but different fiscal…
The European sovereign debt crisis
Consequently, the euro debt crisis is crucial as one intends to study its spillover effects. This is because the crisis was characterized by decisions and events at a political level (Acharya and Steffen, 2012, p. 12). In this case, the Euro debt crisis will be viewed as a financial phenomenon that affected the European region. Historical events associated with the Euro sovereign debt crisis will…