1. Introduction
"Europe's crisis is all about the north-south split."
Alan Greenspan, who was the former U.S. federal Reserve Board (FRB) Chairman, said the situation of Eurozone Crisis as follows. Due to high savings rate and low inflation, northern european countries have been known for frugal countries before the Euro appeared. On the other hand, southern European countries had low savi
the interests and expectations of the people around the world. Euro gave a many economic, social benefits to euro using countries as expected . With Euro's social, economic, status rising, many countries wanted to join theeurozone. Euro using countries had risen to 17 countries from 12 countries in 14 years. But high euro’s status began to fall with the 2008 financial crisis, the bankruptcy c
Overall condition of non-Eurozone
Many people think Europe debt crisis raised only by Eurozone countries.
Hungary is not included country as Eurozone. But early 2012, Hungary faced a crisis.
Czech had high economy stability throughout Europe but now the value of money has declined.
Non-Eurozone countries are also getting hard times.
The countries wanting to join Eurozone are of two minds
Greece’s Problems
- Greece’s economic Structure
Economic contribution ratio in GDP
Greece’s Problems
- An increase in public debts
Greece’s Problems
Eurozone Entry
Sub-primeMortgage
Crisis
Demaged keyindustries
Crisis
What is the solution?
Short-termTask
need to extend exchange risk hedge
Lont-termTask
balance the export and the domestic demand
Systematical cause
① Deeping disparities between Eurozone countries from single exchange rate
▲ EURO doesn’t represent economic situation of individual countries
▲ Greece used overvalued money compare to their economic level
▲ So, Greece monetary policy can’t be able to control their economic system
▲ Greece had a boom days due to liquidity extension not because