Estimated Destination: The Impact of Economic Crisis in Greece on the Euro Zone
Faces Euro worst crisis in its history that extends for 11, Greece, and is one of 16 countries in the European Union with the euro, it has to collect 76 billion dollars during the current year, be able to provide 50 billion dollars, of which before the thirtieth of June, and only will develop a state of deficit for the payment of sovereign debt. If the State fails to repay the debt, the situation would be a threat to the credibility of the World for the euro area, and will infuse fear into the hearts of investors, and keep them away even from other European economies in crisis, and may affect the recovery of Europe’s, albeit weak, according to a report posted on New York Times Syndicate.
Greece had faced before the state of paralysis when it began more than 3 million workers in the public and private sectors have gone on strike for 24 hours in protest of a plan of economic austerity measures announced by the Government before the Greek period. Participants in the strike were workers in the ministries and municipal offices, hospitals and schools and universities, banks, courts, factories, and other institutions. Also it affected rail traffic, road, sea and air strike, with the participation of a number of journalists in the strike, which means the possibility of the absence of news coverage in the country.
Greece the last year entered a spiral of a financial crisis after the arrival of its budget deficit to 12.7 percent of GDP. The Government has a plan to cut the deficit to the maximum allowed by the euro countries are 3 percent by the year 2012, to 4 percent in 2010.
And almost the prevailing economic conditions in all countries are using the euro close to a large extent, which is difficult for them to contain the crisis that occurs to one of them. It may not remain alone in Greece and the crisis for a long time, since it is likely to hit the same crisis, Ireland, Spain and Portugal soon. And threaten the currency market concerns countries such as Poland, Hungary and the Czech Republic.
Over the years, Greece has been hiding indicators, were not many questions raised during the boom years to explore the reality of what is happening. Here is the truth come out now, and Greece should face consequences, most notably corruption and tax evasion, where Millions of institutions without inclusion in the tax records are Greek, while the private sector provides little jobs and tax revenues, and working 1 in 4 of the Greeks in the government sector, indicate that a system designed to produce the deficit.
Although the impact of the gross domestic product of Greece in the total GDP for the euro, which is only 3 per cent, the budget deficit in Greece 12.7 per cent of gross domestic product, is more than four times the limit in the countries of the euro area, and volume deficit 300 billion Euros, and here lies the problem in the cover that deficit does not affect the economic structure of the euro zone. When hit by the global financial crisis, the Greek government did not deal with transparency, particularly in the manipulation of financial records to hide the size of the deficit in its budget, the truth was not clear until late, and perhaps after the last we should mention it.
Although the policy of pegging the belt and many of the actions of the Greek Government austerity, the problem needs to be treated more stringent than the European Union to ensure a prompt resolution of the debts the Greek and more the importance of controlling the effects of the deficit in the coming years to reach such a deficit to the levels allowed in the euro area, namely, 3 per cent of gross domestic product of Greece. Also, the crisis of Greece may be the spark for a long list of other countries experiencing a large deficit in their budgets, such as Spain and Portugal, at great risk if not addressed, the crisis Greece decisively, especially as the debt is the Greek often to creditors within the European Union, especially for economies strong in the region, German and French that the neglect of any damage to the crisis holds multiple political and economic levels within the euro zone.
On the other hand, the delay in the European Union in resolving the crisis will exacerbate the concerns of the Greek impact in the European economy, and will provide another way to help Greece and is the involvement of the International Monetary Fund to help them to wake up.
The one positive aspect of the crisis the Greek that panic in the currency markets that has pushed the euro towards the bottom to levels not seen in the period, which may help exporters in the euro area and help the European economy to achieve growth faster than expected and then to restore confidence and get out of the dark tunnel of the crisis Greece, but the impact of falling value of the euro will take many months to actually reflect on the economies of the Euro.
Whatever the outcome, the area of the euro before a big challenge, so the future must be more aggressive in linking the economies of the European Union is more in tune with regard to state budgets and tax systems. In addition to a follow-up and continuously monitor the economies of the high level of transparency to the Member States ensure early attention to any crisis coming and treated in time before the composition of a snowball that are difficult to stop or at least stopped at great cost to all levels.
By Mohammed Awad Mahmoud Osman, email@example.com, 30/07/2012