Product details

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Abstract

The prime objective of creating Euro Zone comprising of former European Common Market (ECM) countries was to integrate the economies of the ECM, leading to free trade and commerce, labour movement and to become a potential high profile economy. It also culminated in introduction of a common currency Euro at the beginning of the 21st century with member countries agreeing for unified fiscal and monetary compliances as per the direction of the European Central Bank (ECB). However many countries like Ireland, Portugal, Spain and Greece had defaulted in fulfilling the commitments like fiscal deficit reduction, inflation control and expected level of economic growth. On the contrary member countries had attempted to bridge the budgetary gap by issuing bonds to meet the funding requirement which had created huge amount of sovereign debts. This had led to near default of the debt obligation and ECB along with International Monetary Fund (IMF) had resorted to rescue plans to avoid debt default. Under the aegis of ECB a massive Euro bailout fund had been created to the extent of €500 billion, supported by major economies of the Eurozone like Germany. The case study will analyse the rationale in the formation of Eurozone and whether these financial rescue plans would really help in sustaining the long term objectives of achieving unity among the Euro members in supporting Euro as a common currency despite the resentment among the politicians and populace of the EU member countries over the stringent austerity measures required.
Location:
Other setting(s):
2011

About

Abstract

The prime objective of creating Euro Zone comprising of former European Common Market (ECM) countries was to integrate the economies of the ECM, leading to free trade and commerce, labour movement and to become a potential high profile economy. It also culminated in introduction of a common currency Euro at the beginning of the 21st century with member countries agreeing for unified fiscal and monetary compliances as per the direction of the European Central Bank (ECB). However many countries like Ireland, Portugal, Spain and Greece had defaulted in fulfilling the commitments like fiscal deficit reduction, inflation control and expected level of economic growth. On the contrary member countries had attempted to bridge the budgetary gap by issuing bonds to meet the funding requirement which had created huge amount of sovereign debts. This had led to near default of the debt obligation and ECB along with International Monetary Fund (IMF) had resorted to rescue plans to avoid debt default. Under the aegis of ECB a massive Euro bailout fund had been created to the extent of €500 billion, supported by major economies of the Eurozone like Germany. The case study will analyse the rationale in the formation of Eurozone and whether these financial rescue plans would really help in sustaining the long term objectives of achieving unity among the Euro members in supporting Euro as a common currency despite the resentment among the politicians and populace of the EU member countries over the stringent austerity measures required.

Settings

Location:
Other setting(s):
2011

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