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代写英国作业|欧盟国家债务上升的经济影响

时间:2016-12-15 10:50来源:www.ukassignment.org 作者:anne 点击:
全球经济衰退和广泛的经济衰退的主要后果之一是对许多国家的政府财政的影响。在欧元区,影响特别严重的是一些国家,如希腊、意大利、葡萄牙和爱尔兰,都看到他们的预算赤字和国家债务飙升。要纠正这些不平衡的经济挑战是非常高的,需要尝试实施广泛的经济改革,在一个持续的经济不确定性的时间,结合在欧元区的限制。
 
One of the main consequences of the global economic downturn and widespread recession has been the impact on the government finances of many countries. In the Eurozone the impact has been particularly severe with a number of countries such as Greece, Italy, Portugal and Ireland all seeing their budget deficits and national debt soar. The economic challenge to correct these imbalances is very high given the need to try to implement widespread economic reforms at a time of ongoing economic uncertainty combined with the restrictions of being in the Eurozone.
 
Executive Summary 执行摘要
Increase in budget deficit and debt although bad, was needed!, as this leaved the economy from a deeper and prolonged recession, but now the the worse "looks" to be over, Governments need to start tackling the excessive debt level. This will be an audious task, as policy makers will have to strike and balance between lower debt levels and sustainable growth.
 
The bail out to rescue Greece evidenced the fiscal framework problems and that goverments were abusing of it. Government Debt of certain countries is too high and because of the international borrowing between countries there was the risk of contagion, therefore austerity measures needed to be implemented as soon as possible. On the other hand the economy is still recovering from the recession and critics argue that it still too early for the austerity measures and it could lead to a double dip recession.
 
The european commision and the eurozone governments realise the importance to deal with the high debt and deficit due to the economic risks the single currency is facing. Also new legislation and reforms are being discussed and implemented in order to safeguard the future of th euro as a currency. These decisions will have several impacts on the control and resposibilities on each country's management.
 
Introduction 简介
Terms of Reference
 
I was asked by our organisation to write a report and to analyse the economic impacts and economic risks brought by the rapid rise both in budget deficits and national debt for countries within the Eurozone. Also i was requested to compare and contrast the measures taken by Greece and Germany to aim to reduce their budget deficits and burden of their national debt.
 
Proceedings 诉讼
 
In order to examine best way foward for the european economy, official data issued by the eurostat and media publications were examined. An analysis of different opinions of some market analysts were also taken into consideration.
 
Question A
Findings
The bailout package‚¬110 billion in loans over three years from the 16 eurozone countries to rescue Greece on the 2 May, 2010 in order to keep it from defaulting on its debts showed the problems in the single currency economic system due to the lack of control and enforcement by the European Commision on one of the Growth and Stability Pact criteria (Maastricht Criteria).
 
Zangana, A., (10 May 2010) a european economist, is of the opinion that the structural problems within the weaker eurozone members remain, and that serious repair work is now needed to restore credibility to Europe's fiscal framework. Zangana,A., writes, " we expect tougher new rules on fiscal management to follow with stricter implementation of the excessive deficit procedure."
 
On the 22nd May 2010 Euro News reported that the European Union Finance Ministers agreed that there should be tougher sanctions against countries that break budget rules. The meeting's aim was to discuss changes to the way the 27 nations coordinate economic policy. It was agreed that those countries who break off deficit limits could lose EU money and voting rights. The sanctions will remove the fiscal freedom of government as to prevent an escalating debt crisis.
 
Belgian Finance Minister Didier Reynders explained that these measures are essential due to level of deficit countries have. He emphasised that it's not enough to reduce the deficit in Greece or in other countries but they have also to increase growth by creating jobs and generating business. In order to reduce the countries debt, the big economies goverments in europe have spelled out spending cuts and inreased taxes (E.g Germany and Italy) with the aim to halve their deficits by 2013.
 
The cuts in the goverment spending have to be done from some sectors which do not stimulate the economy. Spain is following the echoing moves by Ireland and Greece, but will the country be able to be competitive as to remove the negative perception from International Markets and attract foreign direct investment? With high taxes and a negative perceptiion it will not be easy to attract investment and create jobs. With an unemployment rate at around 20%, Spain has one of the the weakest economies in Europe. There has been chaos in the streets with social unrests and people protesting against the government's austerity measures, introduced to reduce the government debt. The austerity measure introduced by the Spanish government are a:
 
5 per cent cut in civil service pay;
 
6bn cut in public sector investment;
 
1.2bn in savings by regional and local governments;
 
a pension payments freeze;
 
abolition of 2,500 childbirth allowance from next year;
 
600m cut in foreign aid and savings on the cost of pharmaceuticals in the public health system.
 
There are fears that austerity measures aimed at reducing deficits could damage the economy if there will not be a better economic growth in the future. The Economist (3rd July 2010) writes about why critics like the economist Paul Krugman and their concerns that the austerity measures being implemented by goverments will lead to an increase in the unemployement rate and a risk of a double dip recession. Mr Krugman and his allies argue that fiscal stimulus remains an essential for the growth of the economy and that deficit cutting now will cause stagnation and deflation. The Economist (3rd July 2010, p13 - 14) advises that on the other hand deficit spending can not go on for ever and that the supporters for the introduction of the austerity measures are of the opinion that "by boosting firms' and housholds' confidence and lowering the risk premium on goverment debt, well designed fiscal consolidation can actually boost growth."
 
If the European economy falls back into recession, Goverments could not be able to borrow through the Fiscal Policy in order to fight another financial crises because of the high goverment debt. Individuals have increased their concerns to invest in the international markets following the crises, which lead to a lowering in credit rating of some countries. This caused an increased cost of borrowing in the International Markets as countries have to offer higher rates for their goverment bonds, e.g. Greece whose credit rating has been decreased to "junk level", from A3 to Ba1 by Moody's.
 
Meanwhile the ECB (European Central Bank) kept the eurozone interest rates at 1%, which are the lowest in the ECB's 10-year history. The ECB has held eurozone interest rates at a record low of 1% for the last year, as expected in order to sustain growth in the euro area. The ECB aim is to use Monetary policy to maintain price stability in the euro area over the medium term in order to achieve sustainable economic growth, job creation and financial stability. ECB president Jean-Claude Trichet is of the opinion that growth would be moderate and uneven and a decrease in governments' deficit is essential.
 
Since the rates were been kept low, the government is competing with the public sector in order to finance its deficit. The government will have to offer better rates for its government bonds and this will cause a higher cost of borrowing also for the private sector. This is known as the crowding out effect, which gives less incentive for the private sector to invest and create new employment opportunities. This also depends on the availability of liquidity within the domestic market.
 
On the 5th August 2010 during the meeting with journalists in Frankfurt, ECB president Jean-Claude Trichet explained the current economic analysis. Statistics show that the Euro area real GDP increased by 0.2% in the first quarter of 2010 and from the data available for the second quarter and third quarter, things seem that went better than expected. One must analyse which countries have lead to the 0.2% increase, and it is important to differentiate between the large economies and the small countries which make up Euro Zone. The economic situation in the newly emerging Europe (i.e. Czech Republic, Hungary, Poland, Estonia, Latvia, Lithuania) is not the same like the core of Europe (i.e. Germany, Netherlands). The emerging countries have run a huge current account deficit in this decade for the expectation to join the Eurozone. The large deficits made them quite vulnerable to a sudden stop in capital flows.


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