Greek Bailout Issue

The ongoing financial meltdown in Europe has influenced negatively the lives of Greeks. Many people have closed business due to inability to sustain them financially. The government on its part is facing many challenges ranging from internal economic instability to sustaining inter-governmental projects within Europe and in other parts of the world.Advertising We will write a custom essay sample on Greek Bailout Issue specifically for you for only $16.05 $11/page Learn More Above all, pressure is mounting on government to step up and intervene in order to restore normalcy as well as constancy in the financial system. In real sense, the government does not have enough funds to assist all crippling businesses within the state. A number of reasons are always considered before the state interferes with the economy. Greece is a great proponent of free market economy, popularly referred to as lazier faire. The state is weighing options before it takes correcti ve measures. A big problem is how and who to bail out because not all businesses are undergoing financial turmoil. In fact, some are doing very well since they are taking the advantage of high prices. Such businesses usually have low production costs; they are local firms that do not specialize in certain products. The government is really struggling to get into the matter; this is evidenced by its move to invite EU officials to assess the extent of the disaster. There is high possibility that the government will act after the EU officials are through with their mission. The EU on the other hand has noted that the Greek financial problems are not restricted to their local markets alone but a matter that affects the whole union. World Bank and other monetary regimes such as the International monetary fund are expected in Athens very soon to evaluate the current situation and advice relevant authorities on the way forward. The Greek government however is trying hard to restore its fin ancial grip by borrowing locally as it awaits foreign assistance. The government cannot sit back and watch the economy deteriorate even if it believes in the policy that the market is self-correcting and regulating. In case the economy collapses, the government stands to lose much because people will be laid off and many will evade payment of taxes. The government fears that in case the tragedy goes on, crime rates will definitely go up and more funds will be spent in containing crime and other effects of crime. Although the government is in need, its relations with other states cannot be compromised in any way. For instance, the state cannot bend low to other states by giving in to their demands and wishes in order to receive foreign aid.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This is one reason why Greece is depending on the union since EU is a body that represents the interests of all members uniformly. No member within the union is powerful than the other even though in real terms some members are more influential. Conversely, regional blocs, such as the EU are known to contribute little to the welfare of states since they have little resources and inadequate work force to deal with problems. The EU operates as directed by the member states implying that there is no way it can function without approval from all states. Greek scholars are accusing unnecessary politics as solely responsible for delays in solving economic problems. The crisis has generated a new class of people in Europe. Many people go without some basic needs because their pockets cannot sustain them anymore. The scholars observe that the government needs to restructure to come up with an efficient bureaucracy. The citizens are taxed beyond their limits in order to cater for government services. Scholars observe that this is interfering with the social structure because some members of the society are forced to take up or perform roles that are not theirs. The government is forced to tax citizens heavily and drop important development projects to sustain a bloated government. Indeed, this are some of the demands the world monetary regimes will demand before cooperating in restoring the economy. The case of Kenya serves a living example. The Moi regime was forced to open up by adopting western capitalist model and drop some socialist policies. This demanded a lean and clean cabinet as well as giving freedoms to people. The ruling socialist party in Greece can be requested to adopt modern economic aspects and drop socialist ideas, especially the spirit of collectivism. Greek problems seem to be unending because the political climate at home is hostile such that the ruling party cannot come up with sound policies for solving the crisis. Local politicians are opposing the president’s move to formulate and implement long-term policies that can provide lasting solut ions to financial problems.Advertising We will write a custom essay sample on Greek Bailout Issue specifically for you for only $16.05 $11/page Learn More The ruling party is divided over the president’s idea, which has complicated the whole issue of bailout. Without state intervention, the costs of living can sky-scrap to a level that no citizens can withstand. The EU therefore should come to the rescue to Greek government to avoid more problems. Works Cited Bikhchandani, Hirshleifer. A theory of fads, fashions, custom, and cultural change as informational cascades. Journal of Political Economy 100.5 (1992):992-1026. Craig Burnside, Martin, Eichenbaum, and Sergio, Rebelo. Currency crisis models. New York: Prentice Hall, 2008.Print. DePamphilis, Donald. Mergers, Acquisitions, and Other Restructuring Activities. New York: Elsevier, Academic Press. p. 740, 2008. Dwyer, Gerald. The financial crisis of 2008 in fixed-income markets. Journal of Interna tional Money, and Finance 28, 2008:1-5. Fleuriet, Michel. Investment Banking Explained: An Insider’s Guide to the Industry. New York, NY: Mc Graw-Hill. 2008. Print. Funnell, Warwick. In government, we trust: Market failure and the delusions of privatization. Sydney: University of New South Wales Press, 2009Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Kindleberger, Charles and Aliber, Robert. Manias, panics, and crashes: A history of financial crises. 5 Edn. New York: Wiley, 2005. Kolb, Robert. Lessons from the financial crisis: Causes, consequences, and our economic future. New York: Wiley, 2010. Kothari, Vinay. Executive greed: Examining business failures that contributed to the economic crisis. New York: Palgrave Macmillan, 2010. Norris, Floyd. â€Å"Crisis Is Over, but Where’s the Fix?† New York Times, 2011. Peter, Garber. Famous first bubbles: The fundamentals of early manias. Michigan: IT Press, 2001, Robert, Shiller. The subprime solution: How today is global financial crisis happened, and what to do about it. New York: Princeton University Press, 2008.Print. Rosenbaum, Joshua and Joshua, Pearl. Investment Banking: Valuation, Leveraged Buyouts, and Mergers Acquisitions. Hoboken, NJ: John Wiley Sons. 2009. Print. Roubini, Mihm. Crisis economics: A crash course in the future of finance. New Jersey: Wiley, 201 0.Print. Smith, Helena. Greek despair over further cuts sees suicide and crime rates on the rise. Guardian UK. 2011. Web. Stowell, David. An Introduction to Investment Banks, Hedge Funds, and Private Equity: The New Paradigm. Academic Press, 2010. Print. 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