International Business Essay Example | Topics and Well Written Essays - 1500 words - 1

International Business - Essay Example Among these is the fact the assumption that the problem with Greece is based on liquidity instead of solvency. While there might be a problem with liquidity in Greece, the problem that is affecting it most is solvency, something that is not being considered. Instead, the IMF and the European Union are treating the crisis as one of liquidity and they have taken steps to counter it as such. This has not helped Greece recover and may, in fact have made the problem worse than it already was. A second issue about how financial markets work that has been ignored is the fact that the Greek debt will be sustainable in the future and that the economy will eventually absorb all the debt that it currently has. What has not been considered is that financial markets do not work well with uncertainties (such as future sustainability) and instead, they only gain confidence if action and their results are seen immediately. The third issue that has come to affect the Greek economy is that its governm ent was given loans way before a plan on how to spend the money given was made. This ensured that there would be a problem with how the money was spent, because it ended up being lost because of unplanned spending. The fourth issue discussed in the article is that fact that while Greece has been promised enough financial support to end its crisis effectively, it has become almost impossible to implement its recovery program because most of the money has yet to be received. Instead, most of the money received has been given in bits and this has made it impossible for the economy to recover. This has made the financial markets wary of taking part in the Greek economy as its future has become uncertain. When one considers the points brought up in the article, one concludes that the Greek financial crisis is something that can be solved if only the people and organizations involved would work faster than they already are to end it. The only way through which this crisis can be solved is if the financial markets can regain the confidence they once had in the Greek economy. The support of these markets would ensure that the flow of money into Greece would become stable and that its liquidity and solvency problems would end. The only way open for the Greek economy to be saved is for all the money that was promised to be made available at once to ensure stability in the financial markets. International monetary systems The article by Jack Ewing discusses the international monetary systems, dealing specifically with the Eurozone, which has for the last few years had to deal with various economic crises. Among these is that fact that many of the countries in this zone have are in either recession or are about to enter one. This has seriously threatened the Euro and until recently, many had even questioned if this monetary system was viable. There had been fears that because of the financial crisis encountered by Greece, then this country would withdraw from the Eurozone , thus leading others into abandoning the currency. However, this was not the case, and in fact, the year 2012 saw a recovery in confidence for this monetary system as it continued to perform well. The countries whose economies were expected to collapse such as Spain and Italy did not turn out as expected despite remaining deep in recession. This encouraged the continued confidence in the Euro and the belief that things would be much worse if this monetary