Introduction Spain. Present condition. Solution. Conclusion.
It currently consists of: Austria, Belgium, Cyprus, Finland,France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands,Portugal, Slovakia, Slovenia and Spain.
Introduction to Euro Zone crisis
Due to global financial crisis that beganin 2007-08. The official figures were released in 2009 Jan. On 11 Oct 2008, a summit was held in Paris by the Euro group heads of state and government.
Beginning of Crisis
Started in – Oct2009 in Greece Its immediate causes lie with the US crisis of 2007-09.
What Happened and Why? Spain
Sharp Budget Deficit Large External Debts in PIIGS. Spain credit rating downgraded.(Need for external aid)
Reasons for rise in External Debts: household indebtedness. Weakening export competitiveness. Large current account deficit. Reasons for rise in Internal Debts:
Unemployment. Construction Problems
Contagion Effect: -Spain crisis has made investors nervous. Reduced wealth: -Take-home pay is likely to fallImpact on private individuals:
European governments and the International Monetary Fund (IMF) have stunned global stock markets with a 750bn-euro.
France agrees topitch in with 17 billion euro.
It combines unefficient and indiscipline economies.
Too high debts.
Countries affected must: -Grind down Wages - Raise Productivity - Slash Spending - Raise taxes - Transparent Banking system - Endure such Austerity Drives for many years
Either the euro zone shouldgo for integrating their economic policies. OR,
The US crisis led to Global financial crisis, which further spread to Europe. Improved transport infrastructure...