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Title: An overview of the European sovereign debt crisis: a challenge to the Euro-zone which can be surmounted?
Authors: Azzopardi, Ruth
Keywords: Debts, Public -- European Union countries
Financial crises -- European Union countries
Balance of payments -- European Union countries
Issue Date: 2012
Abstract: This dissertation undertakes research about the European sovereign debt crisis by exploring its underlying implications. This crisis saw its apparent beginning in 2010 when Greece filed for financial aid from the European Union. However, I will argue that this is not solely a sovereign debt crisis. It is shadowed by three other crises which are commonly overlooked. European periphery countries are facing a crisis of competitiveness, which resulted from the adoption of the Euro. Presently, we have a situation where a debt-stricken country like Greece, that can no longer devalue its currency, which is trying to compete directly with other European countries, but also with the rest of the world where countries distort competition by pegging their currency at an artificially low level against the US dollar. Another crisis that Europe is facing is that in its banking system which needs to be recapitalized. In the aftermath of the financial crisis of 2007, there wasn't confidence in the interbank markets and the amount of money transfers from the banking sectors of core European countries to banks in peripheralEuropean countries decreased substantially. Yet, banks are now being incentivized (by liquidity operations conducted by the ECB) to purchase European sovereign bonds, which in turn, carry a high default probability. The fourth crisis is nested within the balance of payments of European countries. This crisis has the potential to surpass the other three mentioned crises, and I argue that it is overlooked by many professionals within the financial industry including the EU commission iii and other European response programs which have been set up as a response to the present situation.
Description: B.COM.(HONS)BANK.&FIN.
Appears in Collections:Dissertations - FacEma - 2012
Dissertations - FacEMABF - 2012

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