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The European Sovereign Debt Crisis
Finance & Accounting
Pages 8 (2008 words)
Name: Course Name: Course Instructor: Date of Submission: Contents Introduction 3 Causes of the European Crisis in Greece 4 Market Problems and Liquidity 4 European Debt 4 Economic Fundamentals and European Public Debt 5 Sustainability in Debt 5 Issues with Collective Actions 5 Political Systems 6 Hazards due to the Debt Crisis in Europe 6 The Current Financial Condition in Europe after the Crisis 8 Conclusion 10 Works Cited 11 The European Sovereign Debt Crisis Introduction The European deficit crisis refers to the inability of some European countries to pay off their government debts without third parties having to intervene.
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 starting point of the European debt crisis. This paper will attempt to look at the causes and effects of the European debt crisis. How Greece became the origin and what other countries were affected by the situation. Finally, the current state of Europe after the debt crisis shall be analyzed. Greece had one of the fast growing economies and as a result had a massive deficit. As the global financial crisis came to pass, Greece was greatly affected. This was evident especially on the country’s largest industries (tourism and shipping industry). This led to lump sum spending to keep the economy going, but instead the sovereign debt increased with each passing day. ...
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