Caroline Mutuku
Published: 2018-07-16
Total Pages: 13
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Academic Paper from the year 2018 in the subject Business economics - Economic Policy, grade: 1, , language: English, abstract: Over the years, fiscal crisis in various regions have led to recession which hurts the economies of the concerned countries. Currently, Europe is battling a detrimental debt crisis that has put economic growth across Europe at stake. In this case, Greece is the most hit country by the current European debt crisis because it has huge debt to settle. Ironically, it is quite difficult to experience any significant growth because its competitiveness within the Eurozone remains low, yet it is expected to recover and settle its debts. Greece has no control over the Euro because it is controlled by the European Central Bank that regulates financial flow and rates within the Eurozone. In general, the European debt crisis has affected European countries in different ways. For instance, Greece owes Germany and France a huge government debt. It is estimated that Greece, Portugal and Italy are the biggest debtors within the Eurozone. By the end of the first quarter of 2015, Greece has a government debt to GDP ratio of 168.8%, followed by Italy with 135.1%, whereas Portugal recorded a ratio of 129.6%. On the other hand, the lowest debtors were Bulgaria with the ratio of 29.6%, Luximbourg with 21.6& and Estonia with 10.5%. As a result, the public debt to GDP ratio for the Eurozone has risen to 92.6 percent in the first quarter of 2015 (RT, 2015). Therefore, this article will give a comprehensive overview of the European debt crisis with focus on Greece.