Eurozone Debt Crisis - What are your predictions on how this crisis Essay

Eurozone Debt Crisis - What are your predictions on how this crisis impart breach in the second half of 2011 and what impact will - Essay ExampleSoon after this plausive representation of the future global economy, Greece made headlines, where the investors started asking if it would be ever possible for the country to give way off the ?259 billion in government debt it currently owes (Khan, ibid). Soon Ireland and Portugal followed suit, while predictions show bad signs for Spain and Italy (Lucas, chance on Safe European Stocks out of Unsafe Europe , April 2011). Thus, we find that Euro has taken a deep buffet from the start of the new decade, with widespread fears that this economical crises may lead to the break-up of the Eurozone. Discussion In recent parole published, we find that it presents gloomy figures, The Eurozone crisis has gone from bad to worse as debt contagion threatens to engulf Italy. With analysts predicting that Britain could lose as much as ?43 billion should the Italian economy fold, Chancellor George Osborne called on his Eurozone colleagues to take vital action before the situation gets any worse. He also warned that Britain was not immune from the crisis (Clarkson, Q&A How will the latest eurozone crisis affect the UK? 2011). Thus, we find that the economic recovery has again hit a critical roadblock, where the economic expert Peter Spencer on 18th July 2011 stated, The risks to the world economy and the Eurozone are plain to see, starting with the Greek default, clayey a domino effect on Portugal and Ireland, followed perhaps by Spain and Italy(cited in, skynewsHD, July 2011). In review by the Ernst & juvenile group, we find that the predictions are not very optimistic for the second half of the year. In this report, it is stated that the economic forecasts show every indication of an increasing EU sovereign debt crisis (Ernst & Young Eurozone Forecast, 2011, 4). The review also shows that it is around impossible to avoid the non-payment of the debt incurred by the Greece government. Similarly it would be also impossible to frame an economic restructuring, and in probability the country would require an other(a) bailout loan. However the review further adds that a restructuring nor a bailout are in themselves likely to provide lasting solutions and restructuring would almost certainly carry in its wake the need of similar exercises for Ireland and Portugal. An additional uncertainty is whether debt restructuring comes via an orderly or disorderly process. If it is the latter, the risk of contagion to other countries increases and the Eurozones reasonably healthy growth prospects for 2011 and 2012 are likely to be extinguished. In fact, the economy would go retracted (ibid). Fig 1 The table below shows GDP growth rates for the European Union and give individual countries. Here we find that the 2011 and 2012 growth predictions vary from 4-5% for countries like Turkey and Poland, and an average of 1 -2% for the PIIGS countries at the other end (Source Lucas, 2011). The graph shows a picture where we find that majority of the countries perform badly (economically) in 2011, with indications of a slightly better show in