Greece Joined the European Union in 1981
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Table of contextExecutive summary1. Introduction……………………………………………………………………………………..11.1 Purpose ………………………………………………………………………………………..11.2 Scope…………………………………………………………………………………………..11.3 Methodology…………………………………………………………………………………..11.4 Limitation……………………………………………………………………………………11.5 Assumptions……………………………………………………………………………………12. Introduction the current turmoil in Greece………………………………………………………23. The historical reasons for Greece joined the European Union………………………………….34.1 The cause of the sovereign debt crisis and Global Financial Crisis……………….44.2 How Greece became so indebted……………………………………………………………….55. What will be the economic implication for the country if it decided to leave the European Union?…………………………………………………………………………………………………………………..66. What will be the economic implication for the European Union if Greece leaves?…………………77. Conclusion:………………………………………………………………………………………88. Reference ………………………………………………………………………………………..91. Introduction1.1 Purpose In this report we are targeting at what will be the economic implication for Greece if Greece leaves the Euro zone and also discuss the implication for European Union1.2 ScopeThis report would introduce the relationship between Greece and European Union. Discuss the economic implication for Greece and European if Greece leaves.1.3 MethodologyTo generate enough information supporting our views on the Greece and European Union we searched different books and reports via accessible resource from library and search engine.1.4 LimitationThe research gives a strong support, offering the figures and data, building up a main framework for the report, on the other hand due to the limited time and resource the report itself may have certain limitations and there will yet be some more space to dig and express in depth.1.5 AssumptionsThe following parts of the report will analysis the problem from mainly four angles.a).The introduction of the current turmoil in Greece and historical reasons for Greece joined European Unionb).Discuss how Greece become so indebtedc).Discuss what will implication for the country if it decided to leave the European Uniond).Discuss what will implication for European Union if Greece leaves.2. Introduction the current turmoil in Greece.Ever since the 2008 world economy crisis, Greece has been the worst-hit of the Eurozone states, facing huge debt problems, huge unemployment and some of hard political choices. Suddenly, Greece was shut out from borrowing in the financial markets. It was veering toward bankruptcy, which threatened to set off a new financial crisis (Alderman,2015). This led to the Eurozone countries, the European central Bank and the International Monetary fund, henceforth referred to as “the Troika” (Willem, Rahbari,2012), hand out a 3-year long sop worth € 110 billion to Greece so as to help it ameliorate its financial performance. The proposed measure has done little in achieving what it intended to as the issues afflicting Greece have only increased over the years and have made the dubious solvency of the nation the quintessential “Achille’s Heel” for the Eurozone.
[pic 1]The volatility in Greece has further intensified in the recent past with fears coming to the fore regarding Greece exiting from the 28-member European Union.3. The historical reasons for Greece joined the European UnionGreece joined the European Union in 1981. It adopted the euro in 2002. There were some reasons for which Greece joined the European Union: Firstly, Greece considered the Community to be the institutional framework within which stability could be brought into its democratic political system and institutions.  Secondly, Greece sought to enforce its independence and position within the regional and international system as well as its “power to negotiate”, particularly in relation to Turkey, which, after the invasion and occupation of Cyprus (July 1974), appeared as a major threat to Greece. Within this context, Greece also sought to loosen its strong post-war dependence upon the US.  Thirdly, Accession into the Community was regarded by Greece as a powerful factor that would contribute to the development and modernization of the Greek economy and Greek society.  Finally, Greece wanted, as a European country, to have “presence” in, and an impact on, the process towards European integration and the European model.4.1 The cause of the sovereign debt crisis and Global Financial CrisisThe causes of the sovereign debt crisis and Global Financial Crisis are various from country to country and quite complicate as there are so many countries involved. The main issues can be as follows:The globalization of finance Easy credit conditions during the 2002-2008 period that encouraged high-risk lending and borrowing practicesThe global financial crisis that took place in 2008 from America Internation[pic 2]al trades imbalanceReal estate bubbles Fiscal policy choices related to the government revenues and expenseApproaches used by states to bail out troubled banking industries and private bondholders, amusing private debt burdens or socializing losses.The attached graphs will show the budget deflect and public debt to GDP in the year of 2009 when the sovereign debt crisis took place.[pic 3]From the chats we can easily find the fact that in the year 2009 Greece has been rated as Unsustainable while all other Euro area countries are Critical. Considering that the crisis we are discussing in this article was busted in the same year.