If Greece Were to Exit the Euro What Would Be the Consequences for the Greek Savers ?

If Greece were to exit the Euro and re-introduce its own currency at a lower exchange rate, what would be the consequences for the Grecian savers (whose money is on Greek bank saving accounts)? What are the consequences of such fears on the Greek banks? Could this justify the other European countries, supporting Greek banks? The Greek debt crisis is one of the first serious tests of the eurozone, and one of the well-nigh worrying issues in today`s financial world. What caused the stinting crisis in the republic? Years spent with cheap lending, no financial reforms and too high consumption together were the causes of Greeces current fragile financial situation, which became apparent when the sparing crisis started worldwide. visualize 1 The debt to GDP ratio changes in Greece since 1999 (Wikipedia.org) As attribute 1 demonstrates, Greek debt to GDP ratio exceeded 140% in 2010, and will probably reach 181% in 2012, with a eurozone add up below 90%. The ratio measures creditability, as it compares the liabilities of a country to its production, so the graph tells us that Greeces creditability shows a perpetually decreasing trend.

This tough economical situation is partly the aftermath of the reasons mentioned above, but Greece worsened the phenomenon when violated the Euro convergence criteria with masking its realistic financial details about their deficit before the economic crisis. Because of its enormous debts, and its inability to repay them, the countrys credit rating has been downgraded from BB to CCC by S&P. With no investors, Greece is left alone with increasing debts and interest rates with no other choice than to cut expenditure dramatically in order to reduce its deficit. May 1, 2010, a €110 jillion bailout loan was offered to Greece by EU, ECB and IMF, followed by another €130 jillion in February 2012. As part of the package, Greece had to meet tough austerity conditions. This mainly meant lower spending, cuts in benefits and public... If you want to get a full essay, order it on our website: Ordercustompaper.com

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