| Lam3rok | Дата: Вторник, 25.10.2011, 17:46 | Сообщение # 1 |
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| IMPACT OF GREECE ECONOMIC CRISIS ON INVESTMENT CLIMATE IN THE EUROPEAN UNION
Kniaziev I.I.,
Delini M.M., Ph.D in Economics
Donetsk State University of Management
Description of the issue. Economic crisis began in 2009 year so far can be seen almost in all economic systems both in countries of Europe and countries of Asia and far abroad. Ways and methods for eliminating the consequences of it is a subject of studies scholars on all the world, a view of many study discipline. At this stage of development of European integration and co – operation countries of Europe very important question is the economic situation in Greece. Opinions are divided: someone says that the default in the country is fatal; others say that still can be saved by additional loans and grants from the budget of EU.
Objective of the research is to determine the extent of the financial crisis in Greece on the investment climate in the European Union.
Main results Different theoretical and methodological aspects of op-timization problems financing the investment activity of enterprises is re-flected in the works of local and foreign scientists. Various aspects of the financing of investment activities in the modern economy are considered in the works of I.A. Blank, V. Bocharov, R. Brayley, J. Brigham, D. Blackwell, M.D. Junk, M.N. Kreinin, V. Kovalev, D. Kiduella, S. Myers, Y.S. Stoyanova and others.
The specificity of formation of sources of financing investment activi-ties in terms of market reforms in the economy disclosed in the works I.T. Balabanov, B.C. Bard, B.C. Ivanovo, I.V. Ivashkovskaya, A.Z. Dadashov, T.N. Danilova, V.A. Slepova, D.G. Blueberries, etc.
The European Union provides a variety of grants and loans, but also the quality of the anti-crisis policies in Greece, seen in a simple example. At the start of the debt crisis, when the EU decided it's time to save Greece, the ratio of Greek debt to GDP was 112%, and this was considered a monstrous figure. Now in the process of providing financial assistance, this ratio is 150%, and further lending will inevitably have to increase that percentage. A measure to reduce the budget, which makes Brussels to Athens as a fee for helping destroy a further growth in this country, in principle, and do all sorts of possibilities, even this growth. Thus, sources of repayment are destroyed along with its increase. On default by Greece in Brussels does not work, because it would mean the end of the European Union. And it's not that Greece too valuable for the EU. Simply this - a very fine compromise the organization. On the example of Europe shows that the vector is now rotated to the collapse of the gathering. And when you need to save Italy, the EU will not be able to do this: he did not stay facilities. In turn, such policies of EU member states makes the domestic investment climate is less and less attractive, and despite their best efforts, can`t overcome the economic crisis [1].
Greece teetering on the verge of disaster. As it is not cruel sound, but this is the case:
is little doubt that Greece is waiting for the default. Even the Prime Minister of this country does not exclude such a scenario;
external debt of the Balkan states have already exceeded 330 billion euro. It is expected that this year it will reach 160% of GDP;
investors have very serious doubts about Greece's ability to service its external debt. The rate of reduction of budget deficits, which shows the government is extremely unsatisfactory. They managed to cut only 1% - from 10.5% to 9.5% of GDP;
all that is now the Greek government can offer to their creditors, and, most importantly, his own people - a large-scale privatization and austerity regime: the government intends to sell the Postal Savings Bank, in addition, its share of the connection of Greece and the National Power Corporation (projected earnings from these transactions amount to around 2.1 billion euro);
a long-term (2015) Government plans to create and sell the fund's assets, which will consist primarily of real estate. The expected benefits should be around 50 billion euros;
at the beginning of this year, Prime Minister George Papandreou announced that the government save for only the first half expects to save at least € 70 billion by raising the retirement age and reducing the number of social programs. However, all the restrictions have not yielded the expected result, managed to save less than half the amount claimed;
a year ago, in May 2010, the EU and the IMF gave Athens a loan amounting to 110 billion euro. It was expected that Greece in 2013 to fully restore the lost confidence of investors. But last year shows that all is not so. Experts from the British investment company Legal & General believe that the situation with a debt of Greece is uncertain and tense;
agency Fitch downgraded Greece's sovereign rating from "BB +" to "B +", providing it with a very pessimistic comments, saying that, ac-cording to formal criteria, default in Greece has already occurred.
The most dangerous thing is that many European powers could follow the example of Greece. This is the threat of the euro area. Greece in the event of default can still be excluded from the euro zone, but the output of several countries will inevitably lead to its disintegration.
Now in line for financial aid from the EU after Greece's lined Portugal, Ireland, Iceland. All these countries have long benefited from low interest rates, but then failed to state finances, which resulted in a huge budget deficit, which, moreover, has long tried to hide. As a result, investors lost confidence in these states.
The main difficulty lies in the fact that in the event of failure of Europe to save Greece, it can bring default and the remaining countries. In order not to repeat the fate of Greece and the European Credit to achieve the desired "sick economy" will attempt to manipulate the statistics. It will only deepen the crisis, and only bring the downfall of the euro area. Athens had once reported that its budget deficit does not exceed 3-4%, and then suddenly found out the shocking truth about 12%. The most dangerous thing that is already familiar to the list were added new members. So far, investors have lost confidence in the economy of Spain, Italy and Belgium, but the tendency for them to add up not quite favourable. It is the duty of the latter, for example, at the end of 2010 stood at 96.8% of GDP, the highest in the euro area after Greece and Italy. Undoubtedly, the rate of inflation - a significant criterion for assessing the investment attractiveness of the country. In early 2011, was declared an annual inflation rate of 3%. But now it is clear that to keep it at that level will not succeed. Already in March this year the inflation rate close to 2.6%. In mid-April, the European Central Bank today decided to raise lending rates from 1% to 1.25% [1]. Up to this point in two years rates went down only that, of course, stimulated business activity. All this, of course, affect the euro as the cur-rency of the European Union and all the problems of the euro area, of course, can not help but reflect on the European stock indicators, which show a marked decline. Lowering the credit rating of Greece, worsening forecasts for the sovereign rating of Italy (from "stable" to "negative"), a change of government in Spain, the slowdown in production and nonpro-duction areas of Germany - is not conducive to improving the image of the euro area in the eyes of the leading players in the market. European stock markets fall was like a real crash. Index of Italian securities FTSE MIB fell by 3.32%, the French CAC 40 lost 2.01%, German DAX - 2%, Britain's FTSE 100 - 1.89%, the Greek FTSE / ASE 20 - 1.5%, Spanish IBEX 35 - 1.41% [2].European currency falls after stock markets. In his fall all the more hard euro tends to new records. Historic low against the Swiss franc has been made, now for 1 Euro 1.2323 francs given. According to the U.S. dollar reached a European currency two months minimum: one euro now equals 1.3968 dollars. And the forecasts with respect to the fate of the euro so far remained fairly negative - too much risk investors associate today with the Old World. [2]
Conclusions. Thus, we can see that everything that happens with Greece, a negative impact on all member countries of the European Union and the euro area and the investment attractiveness of Europe gradually, but steadily declining.
References
1. Default by Greece will mean the end of the European Union / / [Elec-trical resource] – mode of access: http://www.km.ru/bez-kup....osoyuza
2. Has the EU's crisis on the investment climate in Europe? / / [Electrical resource] – mode of access: http://www.klubsmi.ru/ekonomiks/3908-2011-05-27-11-39-54.html
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