Case Studies

1282 Words Nov 3rd, 2012 6 Pages
Case Study: Goldman Sachs and Greece

In reference to Chapter 7, did Goldman Sachs use:
I) Moral management,
II) Immoral management or,
III) Amoral management when it assisted the federal government of Greece to secure entry into the Eurozone? Discuss and explain your answer.

When Goldman Sachs assisted the federal government of Greece to secure entry into the eurozone it practiced Intentional Amoral management.

Maastricht Treaty created the Euro. As per the treaty the economy deficit level of the country was already predefined for those countries who were willing to enter euro zone. But Greece entered the European union with a budget deficit that exceeded the allowed threshold. The Greek government borrowed heavily and went
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Greek Government knew that their budget deficit exceeded the allowed threshold which was predetermined by Maastricht treaty. Still they entered the European Union by adopting unfair accounting practices to hide their factual budget deficit. Moreover it kept on spending and raising funds. It should have reduced the spending and must have implemented severe budget practices to control further borrowings which could have helped Greece to bring back its economy in shape. But it failed to do so. Moreover the government did not reflect the lost revenues which were considered to be liabilities.

I would apportion the electorate of Greece 5%

Maastricht Treaty created the Euro. As per the treaty the economy deficit level of the country was already predetermined for those countries who were willing to enter euro zone. But Greece entered the European Union with a budget deficit that exceeded the allowed threshold. The Greek government borrowed heavily and went on spending after the adoption of Euro as their currency. Instead of reducing the spending and borrowing heavily it adopted unfair accounting practices to hide its true budget deficit.

The electorates had the right to know the actual reason for their country’s huge deficit balance. They could have stopped the public spending and could have elected a more efficient government who might have improved their economic conditions. A severe budget practice at the right moment would have avoided the debt crisis.

I would

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