A Comprehensive Presentation on European Crisis

European
Crisis
Compiled By;
Chamkaur Signh
Manoj Kumar
Crisis
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 Area_10,180,000KM2 (3,930,000sq mi)
 Population_739,,165,030 (2011, 3
rd
)
 Pop density_72.5 km2 (about 134/sq mi)
 Demonism_European
Europe
 Demonism_European
 Countries_50 (and 6 disputed)
 Time Zones_UTC to UTC+6
 Internet TLD_.eu (European union)
2Hypup Media ©2014, All rights reservedHypup Media ©2014, All rights reserved

Economy
 An economy consist of production, distribution or
trade and consumption of limited goods and services
by different agents in an given location.
 Agents can be individual, business, organisation or Agents can be individual, business, organisation or
government.

Crisis
 Situation in which economy of country sudden
downturn brought by financial crises.
 Mostly main effect see on downfall in GDP.
 Dying up of liquidity. Dying up of liquidity.
 Rising/falling prices due to inflation/deflation.

European Crisis
 It starts in the year 2009 majorly effect in 2010.
 European commission released a data 1.8% decline in
EU economic output.
 This was a combined government, banking and This was a combined government, banking and
growth and competitiveness crises.
 Some countries in euro zone face difficulty in repay or
refinance their government debts.
 If they are paying but they paying without assistance
of IMF.

European Crisis
 Banks become undercapitalized.
 Also face liquidity and debt problem.
 Economic growth was slow in all euro zone.
 Also unequally distributed across the members of
Continued
 Also unequally distributed across the members of
euro zone.

Reasons
 Violation of EU rules: Greece and Cyprus did not give
real data about the financial and economic situations
which results in high budget deficit and debt levels.
 Banking sector problem: After world financial crises Banking sector problem: After world financial crises
2007 euro banks got collapsed. Because they
become financial weak and their financial flow got
collapsed dramatically. Their money was used to
cover government budget deficits rather than
providing lending to business and household.

Reasons
 Rating agencies: In the beginning of debt crises rating
agencies downgrade the euro zone. It results financial
institutes loose their confidence and Europe face
problem in rising finance.
Continued
problem in rising finance.
 Political conflicts: As the Germany refuse the proposal
of increase in taxes and some other rich nations also.
So it was contradictory to other nations of euro zone.
One more factor is unstable ruling party in Greece and
Italy because there elections were near.

Reasons
 Slow and indecisive actions from European officials:
as the debt crises started in Greece then delay in
corrective action it spread to other countries also.
 17 members of Euro zone had different policies to
Continued
 17 members of Euro zone had different policies to
handle the crises. EU did not give any proper step and
guild lines before it became huge one.

Recovery
 Increase in taxes.
 Countries of euro zone coordinating with EU for
undertaking adjustments to national budgets.
 They make different financial policies for banks They make different financial policies for banks
concentrating more on public finance.
 European central bank (ECB) take charge of all the
operations and give new guidelines.

Recovery
 They concentrate more on new investments.
 All the nation and European investment bank(ECB)
decide to invest 180 billion euro till 2020.
 More stable political environment provide space for
Continued
 More stable political environment provide space for
new deals to outer world.
 Crises is not over yet but Euro zone doing well so it
may be ended in near future.

Impact on India
 High impact on exports.
 FII’s suddenly start withdrawing and results in high
volatility.
 Inflation take place in India. Inflation take place in India.
 India have big business with Europe which gets
directly effected.
 Sectors auto, oil and gas, metal, FMCG and
healthcare take a beating.

Impact on India
 IMF and World bank more concern about Europe so
rest of world have financial problem to some extent
including India.
 Investors start finding ways to minimise their
Continued
 Investors start finding ways to minimise their
investments and risks which causes fluctuation in
investment patterns and forecasts.

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A Comprehensive Presentation on European Crisis

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A Comprehensive Presentation on European Crisis