Karl Betz

How not to do it

9 pages · 3.60 EUR
(September 2011)

I agree with the terms and conditions, especially point 10 (only private use, no transmission to third party)

Introduction:

After the election in autumn 2009 the new Greek government revised the previous conservative government?s budget outlook. Published debt estimates ballooned. And in their wake the interest rates on Greek government bonds went through the roof. Furthermore, the prospect of a possible Greek default led to a surge in bond yields of other European countries.1 Driven by the same news the Euro tumbled, losing about 17 per cent against the Dollar within five month. The European governments perceived this development as an attack on the Euro and ? finally ? intervened by setting up first a line of credit for Greece and then the European Financial Stability Fund (EFSF), entitled to issue debt and to provide emergency lending to EU-Countries in cooperation with the IMF. Furthermore, on May 7 the European Central Bank declared its intention, not only to accept non-investment grade sovereign bonds as collateral for its lending but to intervene in sovereign bond markets and to purchase government debt outright.