Economic Integration And The European Union

On January 1st 1981 Greece joined the European Communities ushering in a period of sustained growth. The countries widespread investments on infrastructure coupled with funds from the European Union led to a sharp increase in revenue from tourism and the service sector. This helped the country reach historical highs in their standard of living. By 2001 Greece had adopted the Euro and in the proceeding 7 years the GDP per capita went from $12,400 in 2001 to $31,700 in 2008, an increase of 156%. The Greek government was encouraged by the European Central Bank and other private banking institutions to

Previously stated, Greece joined the Eurozone in 2001. They went through requirements to join. For a country to become a part of the Eurozone they must show that the country has achieved economic convergence: a requirement to ensure other countries

The Golden Age of Greece is well known for its sculptures, buildings, rulers, and philosophies. Today, modern Greece is known for having economic crisis's as well as political turmoils. Greece's problems began when they joined the European Union. Greek drachma was officially replaced by the euro when they joined. Greece approved the euro in 2001, not knowing what they were getting in to. When the Prime Minister Konstantinos Karamanlis came to power he realized that the budget deficit was not 1.5%, but 8.3%. That outstanding amount greatly hurt the economy. By 2008, Greece's tax collection crumpled and unemployment was at an all time high. Unfortunately, by 2014, 30% of Greek's population did not have a job (Greece Debt Crisis). In contrast, today's Greece is a complete different from the Golden Age. Greek unemployment soared as austerity took its toll.

The European Economic Community was an organization started in 1957 by France, West Germany, the Netherlands, Belgium, Italy, and Luxembourg, in post War World II torn European. This organization was a union between the Steal and Coal Community and The European Atomic Energy Community. The goal of the organization, heavily influenced by John Monnet one of its founders and National Liberation Committee member at the time, was to build a stronger cohesive Europe through collaboration and economic ties to bring mutual prosperity. This organization and its ideals developed into the well know European Union of today, that currently sits with 28 members. However, one controversial possible membership has increased in importance over the years.

The Global Recession of 2007-2009 also considered as the “Great Recession”, which officially lasted from December 2007 to June 2009, was the worst recession that have happened since the Second World War. European countries as Greece, Germany, and Spain were the most affected. All of them believed in the implantation of “Austerity measures”, set of policies with the ambition of reducing government budget deficit by cutting expenditures, increasing taxes or a mixture of both. Governments reacted to the eurozone debt crisis and Great Recession in different ways. One pattern is that expenditures of government rose and taxes fell from 2007-2009, and that the reverse took place from 2010-2012.

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.

Due to debt levels reached a high point where Greece has not any longer able to repay its loans, and were forced to ask for help from its European partners and the IMF in the form of massive loans. Therefore, the higher debt level and the attached conditions have compounded Greece 's woes (Arghyrou & Tsoukalas, 2011)

Having met the euro convergence criteria in 19982, the governments of 11 European sovereignties began plans for the transition with Greece and seven other EU member states being admitted to the single currency area in later years. This process originated during the February of 1992, when the Maastricht Treaty was signed by the existing members of the European Economic Community (EEC). The aim of this treaty, signed in Maastricht, Netherlands was to ensure that 'sound fiscal policies ' were retained by the member states of the European Union. With the signing of the Treaty, a new regulation is now imposed which declares any state newly ascended to the EU must join the Eurozone once 2 years of ‘turmoil-free’ years have been completed and the convergence criteria are met. This meant that after the Treaty was actually enforced new states have become pressured to meet the convergence criteria by any means possible.

Greece has faced many economic challenges in the past few years. The EU discovered Greece had an 8.3% budget deficit in 2004, which worsened with the financial crisis in the US in 2007. Unable to devalue their currency or circulate more money (Because it is controlled by the ECB), Greece continued to spend money carelessly, even though they were not bringing much money in. When Troika imposed austerity measures, Greece’s public sector (and eventually private) had to make job cuts that only worsened the problem. Unemployment and decreased tax revenue caused Greece to sink even deeper into a recession. Bailouts in 2010 and 2012 did not work, and the citizens began to protest the harsh cuts on

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

Greece is currently undergoing a considerable hindrance regarding the economic recession. Huge public debt and the government 's decision to borrow from the International Monetary Fund and the European Union has changed the

When Greece saw the possibility of joining the European Union in 1981, lack of transparency and misreported figures in its bookkeeping system allowed the country to meet the criteria and become a new member of the Eurozone. As investors were confident on the stability of the Euro, Greece was able to borrow cheaply from the European financial markets and sustain an expansionary policy between 2001 and 2007.

Throughout the development of the European Union, many political thinkers tried to give their interpretation of EU, to theorize its essence to give a clear picture and show the path that EU is most likely to take in future. Those have organized themselves in several schools of thought, out of which there are two dominant ones- intergovernmentalism and neo-functionalism. The former was first mentioned by Stanley Hoffmann- professor of Harvard University and then picked up by others.

The economy of a country has a controversial impact on the people of a nation, the nation’s relations with other countries and even other country’s economies. Over the course of about eight years, Greece has faced multiple economic challenges that many other countries have struggled with in the past. One of these struggles includes a shrink comparable the size of the United States’ economy during the Great Depression (1). Though facing economic hardships, Greece has found a way to thrive in other sections of the economy. Greece has multiple trading partners that help lead to a very abundant market for the households and firms. They hope that with some help from the European Union they will find a way out of all the debt they have

The European Union is a fortress of commerce, development, groundbreaking environmental initiatives, proactive human rights champions, and embodies the new era of integration efforts in the post-modern world. Europe is the recipient of global admiration as a prime destination for travelers who seek luxury, elegance, varying cultural experiences, and immersed in ancient history. European integration has produced the almighty EU that is considered to be one of the most respected, notarized, stable and secure intergovernmental and supranational bodies in the world. The appeal of Europe has reached an all time high as increasing global instability rises in neighboring countries surrounding the EU. Immigrants, migrants,