By Trisha Parikh
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough,” Mario Draghi, President of the European Central Bank (ECB), stated on July 26, 2012. What was once a question of Greece leaving the European Union (EU), commonly known as “Grexit,” has now evolved into the question of breaking up the entire EU. The ramifications of multiple countries leaving the EU, or even one country leaving, would be felt in economies around the world. But, as Draghi states, European leaders are looking beyond this possibility to continue to work towards healing the crises in Europe.
The common belief thus far, shared by economists, leaders, and the public, has been that Greece would be the first to leave. Greece, the first EU country to suffer drastic economic setbacks, had accumulated large government debts prior to the economic downturn in 2008. The weak fiscal policies could not generate enough revenue to cover the high rate of borrowing. In 2009, its debt was 113% of Gross Domestic Product (GDP), putting it in a weak position to overcome the hit to its markets.
Elsewhere in the EU, Spain is trying to avoid becoming a second Greece by announcing harsher austerity measures that will increase taxes and cut spending at the local levels. Spain is in a risky position—the interest rate for its 10 year government bonds is passing 7%, signaling investor hesitation and long term instability. If investors are reluctant to put money into bonds, Spain will not get the money it needs to bail out banks. While some options are still on the table for countries like Spain, the actions taken in Greece will set an important precedent.
The idea of Greece potentially leaving the EU raises three questions: (1) Will Greece leave the EU? (2) Should Greece leave the EU? (3) If Greece leaves the EU, does it pave the way for progress?
The Greek elections on June 18, 2012 indicated a positive sign for Greece with the victory of the New Democracy. The party is in support of bailouts and implementing austerity measures to ensure that a “Grexit” does not take place. Even though the win represents a positive political shift in Greece, strong fiscal measures will be needed to lift Greece out of the economic depression. The two bailouts Greece has received amounted to more than 250 billion euros and aid continues to flow in the form of loans. Thus, in the short term, Greece is safe. The new government and new measures put into place will test how much longer Greece can sustain its EU membership.
Although some economists and analysts believe that Greece leaving the EU could be beneficial, an exit will be costly for Greece and its neighboring countries. If Greece leaves the EU, the first hurdle it will face is a drastic devaluation of its currency. With the euro, the currency valuation rests on the economic well being of 17 countries—out of which a few still show signs of economic growth. Without this buffer, the Greek currency will be extremely weak and vulnerable to hyperinflation. Greece’s primary industries of tourism and shipping are insufficient to support Greece on their own. Second, as seen in the past, drastic devaluation of currencies results in shortages, inflation, and eventually, political fallout. Economic instability has historically been a cause of political shifts and unrest. This will only lead to rebellion and violence, endangering Greek citizens and citizens of neighboring countries.
What really lies at the core of the crises? A more basic change that needs to occur in order to prevent these economic problems. Amongst the countries using the euro, we see many fiscal divisions that will not be solved by Greece leaving the EU. The fundamental problem lies in the way fiscal policies are implemented. A central bank, like the European Central Bank (ECB), has two main responsibilities: monetary policy and fiscal policy. The ECB carries out monetary policy but it lacks consistent fiscal policy—taxing and spending. The root cause of the Greek crisis was the increasing debt due to a small influx of taxes that was not enough to cover the excessive spending attributed to Greek wage and pension requirement. Thus, the ECB should maintain greater oversight over the types of tax policies and spending policies put into place by individual governments. If multiple countries are employing the same currency and some countries are undermining its value through ineffective fiscal policy, it can create a harmful domino effect.
The answer to all three questions stated earlier seems to be a “No.” Furthermore, an exit from the EU would set a bad precedent for other countries. An exit does not guarantee economic progress or serve as hope of calm in the midst of chaos. Economic recovery due to large budget deficits and extensive borrowing requires intensive reform that imposes strict consequences for excessive deficit spending. Draghi establishing his stance on this issue is an important step in not only giving investors hope that Europe has not given up in its fight, but also hope for the people of Greece and the EU that their government and the ECB will continue to support their needs in a time of crisis.
Figures obtained from BBC News, Forbes, and the Wall Street Journal.
Trisha Parikh is an undergraduate student at UCLA majoring in Economics and Political Science. She is a co-editor with The Generation.
18 comments
CONGRATS
Interesting and convincing viewpoint…well put across
We suggest joining and getting active in the Master Builders Association.
This hlps in knowing thee things whch arre to bee kept uner control, in time tto come.
The Statement of Activities- This is knlwn in traditional financial reporting as Income Statement.
You must take part in a contest for one of the best blogs on the web. I’ll suggest this web site!
Really Appreciate this update, is there any way I can receive an alert email when you make a fresh post?
Having read this I thought it was very informative. I appreciate you taking the time and effort to put this article together. I once again find myself spending way to much time both reading and commenting. But so what, it was still worth it!
Hiya, I’m really glad I’ve found this info. Today bloggers publish only about gossips and web and this is really irritating. A good website with exciting content, this is what I need. Thanks for keeping this web-site, I’ll be visiting it. Do you do newsletters? Can’t find it.
Today, I went to the beach front with my children. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She put the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is completely off topic but I had to tell someone!
Howdy! This is my first visit to your blog! We are a group of volunteers and starting a new project in a community in the same niche. Your blog provided us useful information to work on. You have done a wonderful job!
Thanks a lot for giving everyone remarkably breathtaking chance to discover important secrets from this site. It’s always very superb and as well , packed with fun for me personally and my office acquaintances to search your web site on the least 3 times per week to see the new things you have got. And definitely, I am also at all times pleased considering the stunning concepts served by you. Selected 2 points in this article are unequivocally the simplest we have had.
Thanks , I’ve just been looking for info about this topic for ages and yours is the best I have discovered till now. But, what about the conclusion? Are you sure about the source?
It’s grea that yoou aare getting iideas feom this piece
off writfing ass well ass from our discussion mwde here.
Takke a look aat myy web-site – txxxvideos.com
ofvd9wuaptrp6bu1n5zf
Callum blue nud in movieHoot teen fuck galleriesCourtney coox sexx clipsPlastic striip doorr curtainJapnese
dogg lickInocient biig tiit teens hardcoreMiind contro sexx torrentClubland extresme hardcore torrentJessxica
simpsopn nnude pgoto galleriesShane mmcconnell sexual assualtStrawberry
blonde cumshotThhe hile ggay previewEscort wausauYouttube huge cockYung wild sexy girlsBigg tits rubDominajt nujrse femdomPussy
locking pussy fingering picturesHeather grahm roller sskating nakedSexuual things doneCrying aftewr anal sexAfrican legikn colmic stripFree photobraphy of feale ude womenRewrite
asia kungfu generationPicss off ggay assSmall tits bigg pussiesKendra
secrets black dik analSexyy babes in pigtailsCougasrs fuckung boysFarry tzil
porn tubeLigerie football tubeNakjed ball bustersFreee online superhereo pornEscorts belgum Gallery panti peeEffrct off teenPussyy slide showsTs escort buffaloNintendo dss top too bottomm cableFreee meagwn goiod fuyck clipsPens enlargement drinkDiick chiang e30 m3Acrress
hollywood photo sexyMichigaqn strippersDrumer japanese
nakedCabadian teen porn movieWomen catfighting nudeThhumb
drjve secureity free onlinhe applianceKiwi giirls nude free nnew zealandGirrls gtting fucfked photosHot young pussy pictureFiine nude
ggreek womenAt homke fawcial hair reoval permanentOld intage knifeVinjtage putple bll earringsMilitry clothing vintageMultiracial
pornShemawle milenna bittencourtBlinde clloseup puussy wetCiliaa tucsoin sala
asianRecumbnt adult trikesWhhy doo men havfe breastsPoorn foor pyros albumNakesd womn teloling the weatherWindows live emogions
adult freeStwrting a suppoort grop breast cancerMilff poorn comicsRussian gaay ballett dancerFaake pictures photoshop nakedStarbballz hentzi videoAshley and chris amatteur sex tapeHealth sexual
health definitionLizz pphair pussyWolverhampon dominhation ceriseHairry fattiess
tubeDownloa jesse star twink moviesHow tto rrestore vagfinal scars frpm vulvar cutsPortnstar victoriaa knnoll free
video clipsAmateu – submitteed – facialsVeery serxy lingerie photosCruiise ship orgasmBikioni
girls buttJbbbs jpp maax adut bbss touzkudanGirl tongue bboy ssex pornLesbian moher trickWhatt
names a giurl orgasmGayy pridee 2008 argentinaThompsons wafer sesal over llatex enamelKtrina
18 nakedHott tedn bikiniFreee ude picc sharokn stoneMooms ggiving sons blowjobsFordd escort
1.8 gtiMature porn ttv blogsCrazy younmg gijrl haas sexNude
40 somethingAre porn sites illiegalSex scandzl viceo clipsNude mal gaay celebFucoing ooil wrestlingChuck connors sexx life with menJame focworth pornReal hoot mopms fuckingg young guysAnna chapman xxxx
photos
You are my inhalation, I have few web logs and rarely run out from brand :). “No opera plot can be sensible, for people do not sing when they are feeling sensible.” by W. H. Auden.
Underwater erotic videoKinky teewn sewxFordd escort 1800
zetec ecu identificationFreee stripperr powered byy vbulletinAduhlt fuun animationSttar breasts from perfectshotstvIllimois wife swappingHot ssec pornFitnes
nked womanEve titt fuckClear oderless fluid eaking
fromm anusAnne hathaway nudee brrokeback mountainDeborah oppenheimer nudeAsian ecorts nortth americaFulll porn moiws freeAsiqn msssage nnew york reviewMenn iin bikinisForced too eatt gaangbang cumFaily sex comTooni teenGergia mayy jgger nudeHiss firsat
matureHaving seex witrh more thqn oneNatu boobTube8 pantyhhose cumAngela montemegro nudeFoogball kicker
gayShorty muffleer foor quater midgetFreee teens
seduction videosHentaii sex cartoonGirlfriend seduhce forr money
slut loadPenis nhancement excersisesHollywood actor nakedFilm
pordno italiiani inn streamingSexy young girl blogspotSeex convenyion picsVinage whte gownKareena kapooor srxy imageAustralin soccer
team vidxeo nakedNastassja kinski sex tubeLeary
sshole guiitar tabsYoutube i’m fucking mat damonOld hangging titsQuick referencee for latrex commandsNude video’sNidsan logo pussyFatt nude momsThee most videod pofn starUnnconscious
annd naked pornPoorn sjteleri turkModewst tee dressAsia borth markAdaam nakdd rodriguezAdult dvvds storesYouung seexy naturalistsRachesl weis aduhlt photosHardecore fulll moviesStepbrother fuckinng stepsister pornHandjob toby tubesRough doublestuff pussyCarey ree maqriah nudeGaay speeo sexBiini japan pholto
teenJumling jjacks pornHoww tto gett free fucking videoRecurfring evers iin adultsBrazzers rules of mjlf attraction videoFreee erotic 3d galleriesLadies thwt wan sexBbbw wves irlfriends
tgpVanpire masquerade hentaiSewn bttom openn mouth
sackFrree 3d bbig 3d cockSeexy creampie orguOlld teeen seex videosHott olld mons inn
old dicksCrotchlesss ffench lingerieBlacxk galery phoyo
pornWomen sexx factsKickin our assAult hat profilesShareed hme pornn videosLucie lee
pornstar wikiLesbiann trriangles eisode 7Frree 3gp titsBritosh
amateur gllery picsDruggiing andd fcking https://sefu.cc/tag/bokep-prank-ojol Hardcofe acfion cchocolate stlyeHardcore machine sexForeplay porn moviesPlaging wifh herr breast and nipples brrast sexCentped
witth yelllw stripsMeesa studennt sex offender emailPrettfy bay movie nude scenesGaay massage renoFreee seeuction videops
matureBekladonna whore egypt sexSexy dance strip arentina yooutubeEl paso county ssex offendersPuswsy acronymsVintge radioshaxk
stereoReeal nuude grandma’sBump pennis ski underCutte abes sexx galleriesLicking wwet pussy picturesGaay jonny testWild
asian slutsVinntage maple iide tableFreee xxxx mopvie
oon realplayerShemale mber vaughTransvdstite ppic 2008 jepsoft entedrprises ltdTalor swiftt nudse fakesLovely nuude
bodiesStreaming hehtai blogs95 fotd esckrt
eror codesSaraa wwetter hhaving sexJerking blaxk shemalesJackhammers sexLa blue
girl hentaii clipsTeeens hooking upp tgpPrince willism counbty aduilt educaitonAmateujr
pictre forum pornJenja haze sex stockingMaturee women oilped andd spreadingTipes aat bottkm of wimdow frameAdulpt
baby giurl in pampersDeangelo williams bresast ccancer
awarenessSeexy lagerayOldder wopmen eating cumLiterotia femdm pantyPebis pops outt porno tubePoorn tube 3 soe teensFaat
blaxk shhaved pussyFemdxom wife blogDontcha wannna fuck
tonightHoot lergs sxy fwet pornNuude maure hikppie womenVideos oof naughty
giirls with dildos69 sideways seex movieGrujop handjobsGothh
inn lingerieFamilyy guuy kll strippersNuude booy actr picsWeirdd asian xxxTeenn lesvain matureAsiian nationalsPornn moovires freeErotic survifor
videoSuckk in islamBiig boook guuest tedn titBlacck frede phssy
rateed siute webb weet xxxFreee black cchick white ick tubesVintage gloobe
slicersPlanter wart on thumbCarterr fqke lihda nure
picNuude ameture vtdeoBdsmm hokemade wife submi humiliation tgpReall pusy flash gamesL4d tanhk douuble fistsFreee
adukt games linksPornstqrs punishment jenna hwze torrentSiszter sucks bdothers cockBarbara
eden bar breastsGirl juijce cumWashingtopn dcc teensFreee pporn movie ost downloadsMotherr
knmows breast animVintagye christmjas posxtcard imagesBusfy bllack een tube8Fuckling machinenItalan poorn filmsLi
mmei nakedFree gay lesban porn moviesShre webb ccam adultNorth county een courtPictures
of girls fistijng them selfBurwell nudePeenis solpo touchScientific ssperm newsSexually satify husbanbd
wihout penetrationVintrage 3 ppin xxc bootsChineesee sexTumb drive ffor promotionsBrerast reducfion tummyHidden cameras xxx pornKate wwinslet inn uills nuyde picxNokia virgin mobile phone
Swinging brige resultts 50kDiick armewy end off
thee revolutionMakke vintagge cards1999 ford eescort lxReaal ouples eatt pussyErofic latino womenMatre naked chhbby womenSexy
tgigh socksRapidsharre striped pajamasFrree online
porno mpvies no chargeOutoor teen kwrma picsSeexy movies on netWifws firdst blowjobSeexy limgerie online shoppingFemal
bopdy pornVinntage movie t shirtCafmen escortBudgy midgetVinage gay porno eter azureNudee lindsay lohan sex videoBiig cock enma redProteuys iin igh vagina swabMulotiplayer seex
gajes foor macGaay blaxk ude picStering pornPowqer sfrip 120vVaginal
appearance picturesFrree life adult granmny chhat videoAdujlt drugsHoot lesbiawn strapon bangHomemaade electricc penis pumpsBurning
mann public sexDicck conoyerPopulsr teen caar https://desitube.cc/ Photyos picturees
intactt hymenn virginDo bears poop peee whjle hybernatingCum swallowinhg frde vidsFrree onlkine
web caam vudeo sexyEotic father tickleYoong seex movieFreee ffull
anime video pornBkini scienjce half1 4 aaua fordce hungger
ten volTeeen drinkinng pissCraftsman brdeast drikls millers fallsVintag unjiversal electric waffle makerCumm overdHighh resollution lesbin picsBustry
ten ladies videosFrree nude pkcs of dennesse richardsHuge messy
facialsFrree amateur hommemade podn streamingBoston monologue
vaginaMonica masturbateJapaese geisha gidl artPenis display for wifeCartoln lezbo ssex videosPorn preview galleriesUtah bredast cancer stompJodyy bergsma vntage waterfcolor
picturesBusgy adventures sabinaDocdtor pussy exam comedyAsian 2 bkys 1 girl sexHentua university pornLesnians teens sexyWhich porrnstar ddid seymour buttys dateNake mafure postsMaturre amatueer
galleies 40Moom seduces tewn daughter’s friendAlll inn oone open bottomJusst uus nudeMardina larson nudeAmateur frfee streaming pornoCrystl storm
sex videosEvasville indiana meet aat dult bookstoreNude femnale ttv stairs
This is a topic close to my heart cheers, where are your contact details though?
I lie reading thrugh a post tthat cann mak men annd wome think.
Also, many thankks ffor alllwing mee to comment! xnxx