A Period Of General Economic Decline

The world has encountered two major economic slumps since World War I. The Great Depression was the longest financial crisis witnessed by the modern world. It started at around October 29th, 1929 and lasted up to the beginning of the Second World War in 1939 (Temin 301). The great depression was by far the worst and longest economic crisis ever recorded in modern history, until towards the end of 2007. The next economic crisis that would be comparable to the Great Depression occurred in the late 2000s, precisely between December 2007 and June 2009 (Roberts 1). It would be popularly referred to as the Great Recession. The Great Depression and the Great Recession were undoubtedly similar in multiple ways. This paper aims at comparing these two great economic crises by highlighting their similarities. This paper answers the question ‘How similar were the failures of the financial markets during the great depression

The Troika, made up of the International Monetary Fund, European Commissions and the European Central Bank have the most to lose in this debt crisis as they own 78% of Greek debt. With so much to lose we have seen European “bailout” agreements that mostly front the Greek government more money coupled with crippling austerity in an effort to “rebuild” the economy. Austerity discourages growth as it cuts the spending of the government who is by far the biggest spender in the economy. The effects of austerity can be devastating, but the true effects are often hidden beneath the messages we get from mainstream news sources. The stereotype of the Greek people as lazy and tax evading has desensitized the public and has made austerity seem like more of a sensible option. The media messages have made strict austerity measures seem justified and in effect have hegemozined the Greek people.

Recently, the U.S. and world economy experienced a global economic recession in 2008 that was considered by some to be the worst economic crisis to plague the U.S., and ultimately the rest of the world, since the Great Depression of the 1930s. This global economic recession is popularly thought to be a result of the housing bubble crash in the U.S. as a result of risky

Thus, America’s unnoticeable reliance on multiple factors of the economy, such as the Gross Domestic Product (GDP) revealed these two national and global economic events: The Great Depression and Great Recession. According to our readings, The Great Depression

After the EFSF bailed out couple of countries including Greece, they decided to find and use a long term strategies in order to enhance liquidity in the EU banking system and there are couple of those rescue solutions:

Throughout society there are many elements that can affect an individual’s life blamelessly, an economy is one of the most significant influences in an individual's life. Although the performance of the economy isn’t always present in an individual’s thought process indefinitely, it plays a key role in almost any decision one makes. The purpose of conducting this research is to place heavy emphasis on the gruesome financial crises that took place in the time period of December 2007 and ended June 2009, the disastrous financial crisis is notoriously known as The Great Recession of 2008. By analyzing and identifying The Great Recession of 2008 it allows us to fully gauge the validity of the crisis and the effects it had on the

Ever since the end of 2009, Greece has been involved in a financial and economic crisis that has been record breaking and shattered world records in terms of its severity and worldwide effects. The Greek government, since the beginning of the crisis, has attempted to take several governmental measures to try and “stop the bleeding,” including economy policy changes, dramatic government spending and budget cuts and the implementation of new taxes for citizens. In addition to this, the government has tried to alter the perceptions of Greek government and economy by the rest of the world in an effort to appear both more liberal and more democratic. Greece has also been working to privatize many previous

The roots of Greece’s economic problems extend deep down into the recesses of history. After the government dropped the drachma for the euro in 2001, the economy started to grow by an average of 4% annually, almost twice the European Union average. Interest rates were low, unemployment was dropping, and trade was at an all-time high. However, these promising indicators masked horrible fiscal governance, growing government debt and declining current account balances. Greece was banking on the rapid economic growth to build upwards on highly unstable foundations. In 2008, the inevitable happened – the Greek debt crisis.

The economic crisis of 2008 in New York had ripple effects around the world, causing deep structural problems within the European Union to crumble the economies of several countries. These countries, known as the PIGS, are made up of Portugal, Ireland, Greece, and Spain, and collectively hold most of the sovereign debt problems of the European Union. After fast growth early in the decade, these countries were spending too much money and not securing their own banking sectors with enough capital. Soon, the debt the PIGS owed caused massive problems throughout the EU, and Germany and France had to come to the rescue of these poorly managed countries. (Greek Crisis Timeline, 1) Now, in 2012, the issue has yet to be fully resolved. Greece is still sinking, and a massive bailout for Greece's banks is required. The debate is whether Germany should continue bailing out Greece and collecting interest on its loans, or whether Greece should try to separate itself from the broader European Union, in an attempt to manage its own finances and declare bankruptcy in order to save itself from crippling interest payments. Each path offers an escape from the present situation that Greece finds itself in, but only the path of bailout results in a harmonious European Union. If Greece fragments off from the EU, then the entire union is weakened as a result. I believe that Greece should accept the terms of the bailout that Germany has provided, and should undergo several years

Greece, the overloaded with enormous debt, defaulted and could not pay 1.5 billion euros ($ 1.7 billion) to the International Monetary Fund on Monday (June 29). The country stands today in front of two options; either to say ‘yes’ to the bailout plan or reject it and proceed into the unknown. ‘Yes’ vote would mean the Greeks accept the terms of the creditors which require Athens to continue austerity policies, tax increases (especially on the middle and wealthy classes), freeze early retirement programs, accept direct European supervision on its finance; and last but not least pay off the debt and interests to the lenders without delay. ‘Yes’ will open the door for creditors to extend loans and financing to Athens and, thus, solving the problem from the standpoint of the troika (European Central Bank, International Monetary Fund, and the European Commission). But this is a very long term program that requires the Greek people to be very patient and bear with its toughness knowing that their economy is weak, the country’s debt exceeds 312 billion euros (177% of GDP), trade balance suffers constant deficit (-1.8 billion euros in last May), while more than 25% of the labor force is unemployed, and about 40% of Greek young people have no job!

On 23 April 2010, the Greek government requested that the EU/IMF bailout package (made of relatively high-interest loans) be activated. The IMF had said it was "prepared to move expeditiously on this request".

Although a commonly accepted view is that the hidden budget deficit in Greece is the beginning of the European sovereign debt crisis, the real causes of this economic crisis can be various. To reveal the whole event, a comprehensive review of the background is

Yet another concern centres on “moral hazard”—that is, the possibility that fiscally irresponsible policies by recipient countries will be effectively rewarded and thereby encouraged by bailout loans. While theoretically a serious concern, the existence of such moral hazard has not been proved.

In 2010, the IMF unanimously agreed to jointly bailout Greece in conjunction with the Euro partners.The board approved Greece’s request for a 30 billion Eurodollar program, and a bilateral financial support of 80 billion Eurodollars that will be available from Euro partners. Talley (2014) notes that many IMF officials said that probably too much of the adjustment burden was placed on the Greek nation while nothing was asked from its European creditors. The end result was there was quite a bit of suffering by the Greek government and the nation as a whole. Could this bailout have been handled better and the results been different if the IMF had followed the rules that were set in place in 2002?

125 TFEU. This is the ‘famous’ no bailout clause which means that the EU or its Member States cannot give another MS financial assistance during a crisis. This article cannot be neglected. It gives each state responsibility for them selves concerning their own crisis. The EFSF and the ESM both were created outside the confines of the EU and the EFSF is a private company therefore is illegal in the eyes of EU law set up by the Eurozone countries. As we saw with the Pringle case a lot of questions have arisen whether ESM is with the provision of the EU treaties, although it was proved that it was legal, it showed us how one can challenge the legality of these emergency