Table of Contents
1 Table of Contents 2
2 Executive Summary 3
3 Introduction 4
4 “Eurozone” analysis 4
4.1 Real GDP Growth 4
4.2 Unemployment 5
4.3 Eurozone Debts 5
4.4 Eurozone under risk 6
4.5 Facing a high threat Greece, Ireland and Portugal 7
4.6 The support of the Eurozone Germany and France 8
4.7 In the middle of the crisis Spain and Italy 8
4.8Global Impact 9
4.9 Effect on local Industries 10
5 Body 12
6 Conclusion 12
Summary of finfings 12
7 Recommendations 13
8 References 15
9 Appendices 15
This report provides key findings to understand the current situation on the Eurozone, and offer a comprehensive analysis to support strategies in the Eurozone for local and international business.
Toaddress this topic, the research focus the analysis in the five countries facing high risk Greece, Portugal, Ireland, Italy and Spain and in the two pillars on the area Germany and France.
Through analysing the main threats facing in the Eurozone such as GDP growth, Debt, and unemployment a better understanding of the situation can be provide. In addition, it will analyse the effect in local andinternational business, and the possible scenarios post the last polices
To conclude the report, some recommendations will be presented to assist our client with their strategy creation in the Eurozone:
In summary, after researching these aspects and considering the current economic climate the key findings of this report are:
* The average trend of the GDP % growth in the Eurozone hadfallen from 2007 until 2009, at this point the GDP % growth had a inflection point and started to show a steadily increase until now.
* Eurozone’s unemployment rate has shown an increase from 7, 5% in 2007 until 10% in 2010.
* The sovereign-debt in the Eurozone has increased in the last three years.
* While Greece, Ireland and Portugal seem to be the most affected countries effect forthe crisis, Germany and France are the most stable countries in the Eurozone. In Addition, Italy and Spain finances have been deteriorating during the last years.
* The estimate for Eurozone trade with the rest of the world in July 2011 gave showed an increased compared with July 2010.
* In July 2011 compared with July 2010, local industrial new orders increased by 8.4% in the euroarea.
The “Eurozone” was launched on January 1999, where more than 300 million people in Europe started to use the Euro as a unique currency. At the beginning was only used for accounting purpose. One year later Euro cash started to replace banknote and coins in each country in the “Eurozone”.
Today, the Euro is being used by seventeen of the twenty-seven countries members ofthe European Union. These are Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, The Netherlands, Austria, Portugal, Slovenia, Slovakia, and Finland (European Central Bank, 2011).
The news in the Eurozone are not optimistic, the financial crisis has entered its 19th month and the finance ministers in Europe have suspended making hard decisions to face thehigh debts in the zone this September 16th and 17th in the Polish city of Wroclaw, instead of that, they have decided to propose again the idea of a tax on financial transactions. (The Guardian, 2011a). This lack of taking risk decision lead to uncertainty in the recovery process .
It seems that the Eurozone's problems are mainly in the banking sector. The decision made by the French andGerman parliaments to guarantee their biggest banks which are under risk, would increase the possibilities of solutions and allow for a logical default by Greece next year. but politicians are still in disagreement, this led to bring back the problem in the ECB. (The Guardian, 2011c).
Real GDP Growth
The graph bellow indicates the GDP % growth from 2007 until now. In the...