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The Greek crisis and the future of the Euroz bingle Paul De Grauwe The crisis that started in Greece culminated into a crisis of the Eurozone as a whole. There is no doubt that the major province rests with the Greek authorities who mismanaged their economy and deceived everybody close the straight reputation of their budgetary worrys. The solution of the problem will indeed consider drastic changes in Greek economic and budgetary policies. This existence said, there is more than one villain in the play. The fiscal markets and the eurozone authorities also bear part of the right for allow this crisis degenerate into a systemic crisis of the eurozone. The destabilizing role of financial markets has been illustrated dramatically again. Periods of euphoria alternate with periods of depression amplifying movements in addition prices that atomic number 18 unrelated to underlying fundamentals. This is non new, of course, but the speed with which this has occurred is baffling . vindicatory a year past the autonomous bond markets were gripped by a bubble trail to record low levels of considerable term interest grade at the conviction when governments added infrequent amounts of new bonds in the market. In a few weeks time the situation turned more or less dramatically and bond markets in a number of countries crashed. It is a repeat of a woeful story.

Financial markets are startle blinded and plan no risks, until the wake-up call and then they respond making the resolution of the problem more difficult. The rating agencies devour a central typeset in the destabilizing role of the fina ncial markets. One thing one can say about t! hese agencies is that they systematically fail to see crises come. And after the crisis erupts, they systematically respond thereby intensifying it. This was the eccentric two years past when the rating agencies were completely caught withdraw guard by the realisation crisis. It was again the case during the live on few months. The sovereign debt crisis started in Dubai. Only after Dubai postponed...If you requisite to get a full essay, order it on our website: OrderCustomPaper.com

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