A good presentation on Eurozone crisis. By Wasiqullah

4. • What is Euro Zone?
• What is Euro Zone Crisis?
• Impact on world Economies?
• Present condition?
• Solution.
• Conclusion.

5. EUROPEAN UNION
• It is formed in 1958.
• Unique economic and political
partnership between 27 European
countries.
• It I s a single market to apply laws to all
member nations.
• Since then, the union has grown in both
power and size.

6. Euro Zone
• It is also called “Euro Area’’.
• It is an economic and monetary union (EMU) of 17
European Union (EU) member states.
• They have adopted the euro as their sole trading currency.
• It currently consists of:
Austria, Belgium, Cyprus, Estonia,
Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Malta, the Netherlands, Portugal, Slovakia,
Slovenia and Spain.

7. Benefits to the European Countries
• Free flow of goods and services
• Tax-free trade area
• Free flow of people
• No custom, no need for ID card.
• All citizens from any of the 27 countries enjoys same rights and
benefits.

8. If a country wants to join the Euro zone,
it must fulfill certain conditions:
• Inflation Rate : <1.5%
• Government Deficit/GDP : <3%
• Government Debt/GDP : <60%
• Interest Rates : < 2%

10.  An ongoing crisis that has been affecting the countries of the Eurozone since late
2009.
 It is a combined Government debt crisis, a banking crisis and a growth and
competitiveness crisis.
 EU comprised of strong economies (Germany, France) & weak economies
(Greece, Portugal)
 Weaker economies of EU (PIIGS) overspent using borrowed money unable to
pay back their debt.

11. • Greece:
• It is a country that is worst effected.
• Budget deficit: In 2009 was 12.7% more then four times the maximum allowed by EU rules and in 2010
it was 13.6% of GDP.
• Debt: was 300bn Euros the biggest in the modern history and it is 113% of GDP nearly double of
Eurozone limit.
• Bail-0ut Package: European Union and IMF agree a 110 billion euros to rescue Greece.

12. Graph of Greece GDP deficit and Debt

13. CONTINUE…
•The EU and IMF agree to a bailout package
to the Irish Republic of 85bn Euros.
•The Irish Republic soon passes the toughest
budget in the country's history.
•Portugal admits it cannot deal with its
finances itself, leading to a 78bn-euro bailout.

14. IMPACT ON WORLD ECONOMIES

15. IMPACT ON USA
,
US dollar has risen.
1 JAN. 2010 1£ = 1.43$
29 SEPT. 2012 1£= 1.2857$.
LESS EXPORT:
US export fell from 15% TO 11%.
Trade deficit increased TO $52.7 bn.
Banks not able to repay.

16. • 1 JAN. 2010 1£ = ¥133.256
29 SEPT. 2012 1£ = ¥100.2828.
• Japan economy hit by an
Earthquake and Nuclear Disaster.
• Japan has a huge debt $12.19
trillion.
• Trade fell by 207%.

17. EFFECT ON RUSSIA
• Russian economy grew 4% in 2010
and 4.1% IN 2011.
• However foreign investment
reduced.
• Economy grew because of high oil
prices:
• $61.80 to $104 FROM 2009 TO 2011.

18. IMPECT ON CHINA
• 1/5TH of China’s export go to Europe.
• Chines Yuan increased by 23% against
the euro.
• Export fell to 15.2%.

19. EFFECT ON BRAZIL
• Economic growth declined from
7.5% in 2010 to 2.7% in 2011.
• 43% increase export to China.
• 17 % Export go to China.

21. GREEK DEBT CRISIS
• In the first quarter of 2010, the
national debt of Greece was put at
€300 billion ($413.6 billion), which is
bigger than the country's economy.
• Greece has the worst combination of
high debt level, large budget deficit
and large external debt.

22. •GDP - $360 billion.
•Debt-GDP ratio – 113% of GDP.
•Budget Deficit – 12.9% of GDP.
•Current Account Deficit- 11.0% of GDP.
•Net Foreign Debt – 70% of GDP.
•Total Outstanding Public Debt- 290
billion euro.

23. • South-eastern Europe.
• Neighboring Serbia, Albania,
Macedonia, Romania, Bulgaria and
Turkey.

24. • European governments and the International Monetary Fund
(IMF) have stunned global stock markets with a 750bn-euro.
• France agrees to pitch in with 17 billion euro.

25. Countries affected must:
•Grind down Wages.
•Raise Productivity.
•Slash Spending.
•Raise taxes.
•Transparent Banking system.

26. • The US crisis led to Global financial
crisis, which further spread to Euro
zone and caused Euro zone crisis, as
these countries were most
affected.
• So strong economies should help
the countries in problem to come
out from the crisis.