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Economic Crisis
Dear writer, the customer requested you to pinpoint how "Moyo's plan to get the world aid-free might work in another context. You are welcome to gather some economic and political facts about Greece and incorporate it in your papers in a paragraph, or so". Your focus was not mainly on Moyo's plan, but the other gathered facts. Please check on that.
What is Moyo's plan to get the word aid free all about? Can it work for Greece? Why or why not? Is it practical or not?
Greece's Recent Debt Crisis Solution Assignment
After joining the European Union, in Greece has begun a period of rapid economic growth, which is mainly dependent on the financial support of the EU. Significant economic benefits brought Greece's membership into the monetary union, but to achieve it, the government has gone on huge borrowing hiding until recently from Brussels because of counterfeiting statistics. Undoubtedly, the EU leaders and the leading European countries should be aware that the figures provided by Greece are far from reality, but political demands and the prospect of greater financial rewards took precedence over the need to comply with European standards. Thus, Greece was to formally comply with the established euro zone economic criteria, whereas in reality the country has lagged far behind the European average level. This gap was largely due to structural problems of the Greek economy. They have led to excessive growth of the budget deficit of the country, to finance which the government was forced to significantly increase the debt. In addition, too big debt, in return, hindered the economic development of Greece.
A huge number of Greece domestic problems started to grow rapidly with the onset of the global financial and economic crisis. In Greece, began a severe recession, still ongoing, with excessive public spending combined with sluggish receipt of income, which was affected by structural weaknesses of the Greek economy, related to tax revenues, cost control, etc. The combination of these factors led to a sharp drop in budget deficit of Greece in 2009. As a result, the country was faced with a lack of confidence in the financial markets, exorbitant interest rates deprived it to the possibility of making new loans to refinance the huge national debt and keeping the economy afloat, and Greece was facing the threat of default. The EU process intentional delay for financial assistance to Athens, in the hope that it will be able to solve the problems by its own, led to the fact that in the first half of 2010, the Greek crisis spread to the entire Euro Area.
Basing on the above situation, the government can intend to overcome the economic crisis and further sustainable development of the country during the following three major conditions:
1. The need for cooperation at the national level, public, private, and non-governmental organizations in addressing the phenomena contributing to the generation and development of the present crisis (Dambisa, 2009);
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2. All actions to overcome the crisis should be in full compliance with the current economic conditions. During these phases, the government should focus on the active reforming of the country's economic and industrial sectors through the restructuring. This will allow to achieve financial sustainability of the country. Three steps, discussed below, can be effective measures to meet the second phase of crisis overcoming . It should be noted that the timing of these steps are approximate, as they depend heavily on changes in economic conditions and a variety of other important factors:
- At the first stage , the main priority should be focused on efficient use of all necessary means to slow down the economic downturn while seeking to avoid the negative effects of the crisis;
- secondly, the main goal is focused on easing the transition from the lowest point of the crisis economy to its revival. At this stage, the priority should be focused to conduct investment policy aimed at the development of economic infrastructure and innovation, which will ensure the growth potential of the national economy and would be an effective means of improvement of regional and local markets;
- The third phase is expected to begin with a steady rise of the economy by combining these driving factors as the development of local markets and the expansion of exports of new products and services created thanks to the successful commercialization of innovations. This will allow the Greece economy to come into line with the global development trends such as the move to reduce the consumption of hydrocarbons and other non-renewable natural resources, the desire to improve the environment and to ensure long-term sustainable socio-economic development.
3. The adoption of a set of economic measures designed not only to overcome the consequences of the crisis during the next 3 years, but aims to achieve long-term strategic goals. Thus, specific measures should be taken to stimulate private investment in the development of all spheres of social and economic life of the country, with a focus on investing in the development of human resources and R&D. At the same time, this will create an opportunity to provide flexible management of available resources for emergency response to unforeseen challenges of global economic conditions. In this case, the measures should be carefully selected in accordance with the following essential conditions:
- All activities should be clearly planned and aimed at achieving concrete results at maximum efficiency;
- The measures should be implemented quickly and at an early stage to bring the desired effect;
- All measures should only be temporary and have short-term nature.
Undoubtedly, in the next five years, the situation in Greece will remain difficult. If everything turned out, Europe will be the most prosperous region. If the world for a few years is not collapse, and Europe does not lose out the competition with China, then Europe will overcome the crisis soon. If industrial production growth remains, and the balance of exports / imports continues to increase, there is a chance for Greece to overcome the crisis. In any case, Europe will need to continue to create a mechanism to develop the industry and the agricultural sector, as well as optimize finance and management sectors.
In this regard, it is important to understand that the crisis in Greece will not end soon. The European Union will try to fix the causes of the crisis in Greece, regardless of the results of the Greek leadership taken measures to stabilize the national economy. The EU has developed a package of measures to tackle the Greek crisis that Greece imposed contrary to its national interests and clearly inadequate estimated population of the country as well as provide the most severe budget cuts.
The causes of the crisis in Greece are based on the simple fact that the US is creating massive instability in the world to slow down the restructuring of the world economic system . The crisis in Greece and the EU is only one of the directions of movement, which once again confirms that the situation in the country's economy is harder than it looks, and debt relief will not solve all the problems. Experts have repeatedly drawn attention to the fact that they see no point to the weak growth in the Greek economy. Some experts believe that the most acceptable and adequate solution in such a situation is the Greek exit from the Eurozone. Moreover, after Greece, the crisis can be followed by other countries - Portugal, Spain, Italy; that creates doubts that the EU is able to help its members to overcome a difficult situation.
Greek crisis reminded how dangerous the policy of government debt increase????? (Maniatis, 34). Even if the package of anti-crisis measures of the Greek government take effect, the political leaders should not forget that one of the keys is not only financial, but also social stability. Today there is no doubt that the crisis in Greece turned out into a euro crisis, which can be transformed into the European political crisis that puts on the agenda the question of the need of existence of the European Union.
