Greek Crisis
Greece Crisis:
Analysis, Learnings and Takeaways
Greece Crisis:
Analysis, Learnings and Takeaways
PGP28303 Aakanksha Sharma
PGP28300 Abhishek Sivaraman
PGP28302 Sandeep K. Singh
PGP28301 Upasana Rustagi
PGP28303 Aakanksha Sharma
PGP28300 Abhishek Sivaraman
PGP28302 Sandeep K. Singh
PGP28301 Upasana Rustagi
Contents
Greek Crisis: Background 2 Greek Crisis: Consequences of sub-prime 3 Greek Crisis: Troika steps in 3 Should Greece leave the Euro Area? 4 Alternatives 5 Key Learnings 6 Takeaways for India 7
Greek Crisis: Background
Through this write up, we are trying to explain the circumstances which led to the sovereign debt crisis in Greece.
European Union was established in the year 1992 through the Maastricht treaty. The purpose of formation was to create something powerful on the lines of the USA, The United States of Europe. Also, the idea was to establish and maintain peace in the turbulent regions. In the year 1999, Euro zone was formed and a common currency, Euro, came into being. Countries set aside the currencies they each were using previously and instead dealt themselves Euros. Greece undertook the same operation. It relinquished its drachmas and received an equivalent amount of Euros. Henceforth Greek firms and Greek citizens could buy goods and services anywhere in the Euro zone with their Euros.
Greece has always been an overspending economy. It’s a leisure driven economy where the government always tends to spend more than its means. This trend went to a new level when the Greek government got access to cheap and easier financing. Due to the introduction of the common currency, they could borrow as easily as a strongly backed Germany. The government previously used to monetise its deficit by printing currency. Since the choice of printing currency was no longer available due to the introduction of the monetary union, the government now resorted to borrowing lavishly to meet its deficit. The debt to GDP ratio
Analysis, Learnings and Takeaways
Greece Crisis:
Analysis, Learnings and Takeaways
PGP28303 Aakanksha Sharma
PGP28300 Abhishek Sivaraman
PGP28302 Sandeep K. Singh
PGP28301 Upasana Rustagi
PGP28303 Aakanksha Sharma
PGP28300 Abhishek Sivaraman
PGP28302 Sandeep K. Singh
PGP28301 Upasana Rustagi
Contents
Greek Crisis: Background 2 Greek Crisis: Consequences of sub-prime 3 Greek Crisis: Troika steps in 3 Should Greece leave the Euro Area? 4 Alternatives 5 Key Learnings 6 Takeaways for India 7
Greek Crisis: Background
Through this write up, we are trying to explain the circumstances which led to the sovereign debt crisis in Greece.
European Union was established in the year 1992 through the Maastricht treaty. The purpose of formation was to create something powerful on the lines of the USA, The United States of Europe. Also, the idea was to establish and maintain peace in the turbulent regions. In the year 1999, Euro zone was formed and a common currency, Euro, came into being. Countries set aside the currencies they each were using previously and instead dealt themselves Euros. Greece undertook the same operation. It relinquished its drachmas and received an equivalent amount of Euros. Henceforth Greek firms and Greek citizens could buy goods and services anywhere in the Euro zone with their Euros.
Greece has always been an overspending economy. It’s a leisure driven economy where the government always tends to spend more than its means. This trend went to a new level when the Greek government got access to cheap and easier financing. Due to the introduction of the common currency, they could borrow as easily as a strongly backed Germany. The government previously used to monetise its deficit by printing currency. Since the choice of printing currency was no longer available due to the introduction of the monetary union, the government now resorted to borrowing lavishly to meet its deficit. The debt to GDP ratio