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    Personal Effectiveness Lab: Euro Crisis 2010

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    Anchal Singh
    The document summarizes the 2010 European debt crisis that began in Greece. It provides background on key terms like sovereignty, debt, and crisis. It describes how Greece had high deficits and debt levels that it could no longer repay, resulting in a sovereign debt crisis. This crisis threatened the stability of the eurozone and the European Union. As a result, Greece received a bailout package of 110 billion euros from the EU and IMF, but had to implement austerity measures that led to public protests. The crisis had broader effects on financial markets and other eurozone countries.

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    Personal Effectiveness Lab: Euro Crisis 2010

    Uploaded by

    Anchal Singh
    4K views20 pages
    The document summarizes the 2010 European debt crisis that began in Greece. It provides background on key terms like sovereignty, debt, and crisis. It describes how Greece had high deficits and debt levels that it could no longer repay, resulting in a sovereign debt crisis. This crisis threatened the stability of the eurozone and the European Union. As a result, Greece received a bailout package of 110 billion euros from the EU and IMF, but had to implement austerity measures that led to public protests. The crisis had broader effects on financial markets and other eurozone countries.

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    The document summarizes the 2010 European debt crisis that began in Greece. It provides background on key terms like sovereignty, debt, and crisis. It describes how Greece had high deficits and debt levels that it could no longer repay, resulting in a sovereign debt crisis. This crisis threatened the stability of the eurozone and the European Union. As a result, Greece received a bailout package of 110 billion euros from the EU and IMF, but had to implement austerity measures that led to public protests. The crisis had broader effects on financial markets and other eurozone countries.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    Download as pptx, pdf, or txt
    4K views20 pages

    Personal Effectiveness Lab: Euro Crisis 2010

    Uploaded by

    Anchal Singh
    The document summarizes the 2010 European debt crisis that began in Greece. It provides background on key terms like sovereignty, debt, and crisis. It describes how Greece had high deficits and debt levels that it could no longer repay, resulting in a sovereign debt crisis. This crisis threatened the stability of the eurozone and the European Union. As a result, Greece received a bailout package of 110 billion euros from the EU and IMF, but had to implement austerity measures that led to public protests. The crisis had broader effects on financial markets and other eurozone countries.

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    of 20

    PERSONAL

    EFFECTIVENESS LAB

    EURO CRISIS 2010


    EUROPE CRISIS
     Before one to could even think of the end of
    great recession of 2008, Greece gave birth to
    another crisis.
     Greece debt crisis is actually an evolution of

    the global crisis.


     Greece allowed deficits from Central bank

    and government bonds to pile up.


     Greece debt came to light in 2009.
     Sovereignty
     having supreme independent authority over a territory
     supreme law making authority

     Debt
     Debt is that which is owed
     Moral obligation not requiring money

     Crisis
     When the debt level increases to a level that it cant be
    repaid
     This can even lead to lower economic growth and
    worsen the situation of the economy in terms of
    recession.
    SOVEREIGN DEBT CRISIS
     Sovereign debt crisis is a situation wherein a
    country with a powerful higher authority
    enters the state of not being able to repay its
    debts and obligations.

     This leads to higher fiscal deficit of the


    economy and lower growth.
    Euro zone
     It is an economic and monetary union of 16
    European union members.
     Adopted EURO currency as their sole legal tender.
     The European Central Bank (ECB) is the institution of
    the European Union (EU) tasked with administrating
    the monetary policy of the 16 EU member states taking
    part in the Euro zone.
     Members-
    AUSTRIA,BELGIUM,CYPRUS,FINLAND,FRANCE,GERMA
    NY,GREECE,IRELAND,LUXEMBOURG,
    MALTA,NETHERLANDS,PORTUGAL,SLOVAKIA,
    SPAIN,SLOVENIA.
    ROLE OF International Monetary Fund
     Maintain stability and prevent crisis in
    international monetary system.
     Provides advice to its 184 member countries

    and raising their living standards.


     Serve as a forum where they discuss

    national, regional and global consequences.


     Temporarily financing its members
    countries to assist them.
    EUROPEAN UNION
     Established in 1993.
     Currently has 27 members.
     Committed to regional integration.
     Ensures the free movement of goods,
    services, people and capital in all
    member states.
    GREECE FACTOR
     Greece is a developed economy with high standards of
    living.
     It has high human development index and high purchasing
    power.
     In 2009 Greece was ranked second lowest on EU’s index of
    economic freedom.
     Country suffers from high level corruption.
     Economic growth turned negative in 2009 for the first time
    since 1993.
    CURRENT CRISIS
     The European debt crisis came into limelight with Greece.
     This was done by the new government who took charge
    after the general elections.
     Shocking role of Goldman Sachs in the fraud.
     New government revealed the facts which actually
    happened in which the previous government had
    overspent and also reported a debt which ballooned to
    12.7% of the GDP.
    ISSUES
     The main issue of government is debt
    refinancing.
     It had total sovereign debt of Euro 254bn and

    out of which Euro 50bn needs to refinanced


    in 2010.
     Recent efforts to raise money through sale of

    bonds also failed as amount raised is too less


    then required.
     If the situation is such Greece must declare

    itself insolvent.
    GREECE DATA’S
     Greece has highest budget deficit of 13.6% of
    GDP or euro32.4bn(as of April 2010).
     Budget deficit- Highest in the world.
     Debt to GDP ratio- 113% (as of nov.2009).
     Debt-GDP ratio 2nd highest in EU.
     Debt of euro 216bn (as on January 2010).
    BAILOUT PACKAGE
     Greece was in urgent requirement of funds and
    on April 23rd it approached IMF and EUROZONE’S
    assistance in form of Bailout package.
     Condition for funds from IMF was that the
    economy must implement Austerity measures.
     EU & IMF agreed to 110bn Euros (80bn Euros
    from EU & 30bn Euros from IMF).
    CONTROVERSIES
     Public protest in Greece due to implementation
    of austerity measures.
     Protests and pressure from other European
    nations mainly Germany(4.6% in EU) because the
    debt load is hitting the mark of 121% of GDP.
     Downgrading of Greece bonds to “junk status”
    BY S&P.
    EFFECTS
     Stock markets plummeted.
     Short term borrowing rates had hit levels of
    38%
     Yield premium widens owing to increased
    cost of borrowing for Greece.
     Depreciation of currency.
    RESCUERS
     Germany, the largest euro member, because
    of the feeling that it could lead to worsening
    of situation to the other Europe nations.
     IMF by funding the bailout package.
     EU for providing SPECIAL PURPOSE
    VEHICLES(SPV) of euro 440bn + 60bn(for
    emergencies).
    CONCLUSION
     Failure of Greek financial system will benefit
    the US treasuries.
     Help US to correct its own financials.
     Greek govt. targets public debt to a limit of

    60% and deficit to 3%


     Greece announces increase in taxes and

    spending cuts to control deficit.


     EURO countries will fund Greece with terms

    set by ECB.
     IMF can provide more funds, if at all required.
    THANK YOU FOR YOUR TIME

     CONTRIBUTORS: Neha Soni


    Rajdeep
    Piyush Sachdeva Chakresh Mittal
    Harshini Rajendran Amit Mittal
    Anchal Singh

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