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EUROZONE

DEBT CRISIS

CONTENTS
What is euro zone ?
What is euro zone crisis?
Country affected and impact on
them...
Present condition .....
Solutions.....

Euro zone

Euro zone is an economic and monetary


union [emu] of 17 European country.....
The eurozone currently consists of Austria, Belgium,
cyprus,estonia, Finland, France, Germany, Greece,
Ireland, Italy Luxemburg, Malta, the Netherlands,
portugal,slovakia, Slovenia, and Spain

In 1998 eleven member states of union had met the


euro convergence criteria, and the eurozone came
into existence with the official launch of the euro
(alongside national currencies) on 1 January 1999.

Ten countries (Bulgaria, the Czech republic, Denmark,


hungry, Latvia, Lithonia, Poland ,romania,sweeden,
and the united kingdom) are EU members but do not
use the euro

Administration
of euro zone
The monetary policy of all countries in the
eurozone is managed by the europian central
bank (ECB)
Whereas
all EU member states are part of
theEuropean System of Central Banks(ESCB).
The eurozone is represented politically by its finance ministers,
known collectively as theEuro Group, and is presided over by a
president, currentlyJerom Disselibelbolem

Reasons
GDPStatistical
Government
Government
Budget
of
growth
crisis compliance:
rates:
deficit
credibility
debt-level:

REOSON
PORTUGAL
inflated top management and
head officer bonuses and wages
in the period between
thecarnation revolution
in 1974 and 2010. Persistent and
lasting recruitment policies
boosted the number of
redundant public servants.
Riskycredit, public debtcreation

SPAIN
Debt was largely avoided by
the ballooning tax revenue
from the housing bubble,
which helped
accommodate a decade of
increased government
spending without debt
accumulation

IRELAND

The Irish sovereign debt crisis


was not based on government
over-spending, but from the
state guaranteeing the six main
Irish-based banks who had
financed aproperty
bubble
GREECE

Greece was hit especially hard


because its main industries
SHIPPINGandTOURISM
were especially sensitive to
changes in the business
cycle.
The government spent heavily
to keep the economy
functioning and the country's
debt increased accordingly.

EFFECTS ON INDIA
INDIA EXPORT TO EUROPE COULD WITMESS
ASLUMP CLOSE TO 10%
EXPORT DRIVEN SECTOR SUCH AS TEXTILE
AND SOFTWARE ARE LIKLY TO BEAR THE
BURNT
ABOUT 22-28 REVENUES OF INDIAs top tech
major come from Europe whose revenue ids
affected
govt overall target of $200 million fiscal could
At stake.

CHECKS
European Financial Stability Facility (EFSF)

On 9 May 2010, the 27 EU member states agreed to create


the European Financial Stability Facility, a legal
instrument[aiming at preserving financial stability in
Europe by providing financial assistance to eurozone
states in difficulty. The EFSF can issue bonds or other debt
instruments on the market with the support of the German
Debt Management Office to raise the funds needed to
provide loans to euro zone countries in financial troubles,
recapitalise banks or buy sovereign debt.
On 26 October 2011, leaders of the 17 eurozone countries
met in Brussels and agreed on a 50% write-off of Greek
sovereign debt held by banks, a fourfold increase (to
about 1 trillion) in bail-out funds held under the

Quarries?

Thanks