Implosion in Greece? An analysis of the Greek debt crisis and its impacts on Europe and world markets

Greek debt crisis;euro debt crisis;Eurozone;euro;Greek default;Greece;European Central Bank;European Union;European sovereign debt crisis;Greek default;Portugal, Italy, Ireland, Greece, and Spain (PIIGS);currency unions;fiscal policy;solutions to the Greek debt crisis;future of the Eurozone;European public debt

Vickstrom, Erik ; Kahn ; Charles M.

关键词: Greek debt crisis;    euro debt crisis;    Eurozone;    euro;    Greek default;    Greece;    European Central Bank;    European Union;    European sovereign debt crisis;    Greek default;    Portugal, Italy, Ireland, Greece, and Spain (PIIGS);    currency unions;    fiscal policy;    solutions to the Greek debt crisis;    future of the Eurozone;    European public debt;   

Others  :  https://www.ideals.illinois.edu/bitstream/handle/2142/31203/Vickstrom_Erik.pdf?sequence=1&isAllowed=y

美国|英语

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【 摘 要 】

This thesis seeks to address the impact of the Greek debt crisis on the stability ofthe euro and Eurozone, and the best solutions to the crisis. The chapters of this studyexplore currency unions in theory and practice, the operational components of theEurozone, fiscal policy and its importance in Eurozone maintenance, and provide anoverview of the events leading up to the Greek debt crisis. It analyzes strategiesimplemented so far to solve the crisis, looks at shifts in interest rates on Greek debtbonds, and performs a comparative analysis of previous currency unions that failed inan attempt to draw lessons from those examples. The study provides evidence that thecurrent tools utilized to stabilize Greece are unsustainable over time, and if Germanydoes not provide adequate aid, Greece will further default on its debt, which will lead tosignificant implications for the Eurozone in the future.The global financial crisis of 2008 was extremely detrimental to the financial andeconomic well-being of countries, organizations, and individuals worldwide. Thosereaping the benefits of an economic boom suddenly found the world in economicturmoil, with the downward spiral of financial markets forcing many to question thestability the longevity of the crisis. Since late 2009, conservative investors haveexpressed their fears that a sovereign debt crisis will develop within Europe, and put thefuture of the Eurozone at risk. While increases in sovereign debt load have been mostpronounced in only a few Eurozone member nations, they are becoming increasinglyproblematic for the currency union as a whole.The European Union continues to call on Greece to implement austeritymeasures in order to reduce debt and cut spending. Past measures to counter the debtiiicrisis have focused on providing the country with multi-billion euro bailout packages inexchange for implementing austerity. The majority of Greek citizens continue to publiclyreject these measures, even with knowledge of the benefits some austerity measuresand bailouts will have for Greece.As of this publication, Greece has partially defaulted. In March 2012, following asecond EU/IMF bailout and austerity measures, private sector holders of Greek debtagreed to a debt-swap, with write off losses of $141.4 billion as a part of the debtexchange. While the effects have not been widely felt, further default will severelyimpact the future of the Eurozone.