Еffects of the debt crisis in Greece on European integration
Keywords:
Fiscal spending, external debt, recession, unemployment, poverty line, write off losses, fiscal system, budget surplus, insolvency, fiscal criteria, write off half of the debt, structural reformsAbstract
The on-going process of regional integration is the greatest opportunity for enhancement of globalization. Therefore, the effects of the Greek crisis go far beyond the borders of the European Union. Under the circumstances the Greek crisis in the European Union is of vital importance. “Troika” – European Commission, IMF and European Central Bank - rather than Greece should be mostly held responsible for the adverse effects. Although Greece is insolvent, there is a solution. The amount of the debt should be reduced from €320 billion to 160 billion, or below 90 percent of GDP. At such rate, the remaining debt would be repayable. The reprofiling of the debt to actual long-term capabilities of Greek economy should be based on well-targeted financial adjustment and corresponding structural reforms.
