A Review of European Sovereign Debt Crisis: Causes and Consequences

G. M. Wali Ullah; Samiul Parvez Ahmed

doi:doi:10.11648/j.ijber.20140302.13

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A Review of European Sovereign Debt Crisis: Causes and Consequences

G. M. Wali Ullah, Samiul Parvez Ahmed

Published in International Journal of Business and Economics Research (Volume 3, Issue 2)

Received: 28 March 2014 Accepted: 10 April 2014 Published: 20 April 2014

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Abstract

This paper researched on the causes, current consequences and potential implication of the European debt crisis. The crisis was found to be a result of factors including international trade imbalances, the effects from the global crisis 2007-2012 and the failure in bailout approaches to cure Europe from the global financial distress. This has caused panic across the world due to the fact that negative financial situations in peripheral countries in Europe might further demolish the global financial markets. Even though significant growth was presumed from the introduction of Euro, the financial crisis resulted in sharp rise in bond yields, CDS, cross-correlation and spillover effects across bond markets of the Eurozone. Yield curves of the GIIPS countries acted as a cluster; differentiating from stronger and more stable economic forces. In addition, crisis resulted in significant dip of market confidence on Euro and depreciation of Euro against major currencies. Commodity prices i.e. spot price of gold rose to almost 300% over the time crisis period, utilized by governments as a defense mechanism against the economic downturns. Potential problems that might arise from this severe crisis and financial prospects of European states as well as governments over the world are also assessed and discussed

Published in	International Journal of Business and Economics Research (Volume 3, Issue 2)
DOI	10.11648/j.ijber.20140302.13
Page(s)	66-71
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Sovereign Debt, Eurozone Crisis, GIIPS, Sovereign Default

References

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APA Style

G. M. Wali Ullah, Samiul Parvez Ahmed. (2014). A Review of European Sovereign Debt Crisis: Causes and Consequences. International Journal of Business and Economics Research, 3(2), 66-71. https://doi.org/10.11648/j.ijber.20140302.13

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ACS Style

G. M. Wali Ullah; Samiul Parvez Ahmed. A Review of European Sovereign Debt Crisis: Causes and Consequences. Int. J. Bus. Econ. Res. 2014, 3(2), 66-71. doi: 10.11648/j.ijber.20140302.13

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AMA Style

G. M. Wali Ullah, Samiul Parvez Ahmed. A Review of European Sovereign Debt Crisis: Causes and Consequences. Int J Bus Econ Res. 2014;3(2):66-71. doi: 10.11648/j.ijber.20140302.13

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@article{10.11648/j.ijber.20140302.13,
  author = {G. M. Wali Ullah and Samiul Parvez Ahmed},
  title = {A Review of European Sovereign Debt Crisis: Causes and Consequences},
  journal = {International Journal of Business and Economics Research},
  volume = {3},
  number = {2},
  pages = {66-71},
  doi = {10.11648/j.ijber.20140302.13},
  url = {https://doi.org/10.11648/j.ijber.20140302.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20140302.13},
  abstract = {This paper researched on the causes, current consequences and potential implication of the European debt crisis. The crisis was found to be a result of factors including international trade imbalances, the effects from the global crisis 2007-2012 and the failure in bailout approaches to cure Europe from the global financial distress. This has caused panic across the world due to the fact that negative financial situations in peripheral countries in Europe might further demolish the global financial markets. Even though significant growth was presumed from the introduction of Euro, the financial crisis resulted in sharp rise in bond yields, CDS, cross-correlation and spillover effects across bond markets of the Eurozone. Yield curves of the GIIPS countries acted as a cluster; differentiating from stronger and more stable economic forces. In addition, crisis resulted in significant dip of market confidence on Euro and depreciation of Euro against major currencies. Commodity prices i.e. spot price of gold rose to almost 300% over the time crisis period, utilized by governments as a defense mechanism against the economic downturns. Potential problems that might arise from this severe crisis and financial prospects of European states as well as governments over the world are also assessed and discussed},
 year = {2014}
}

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TY - JOUR
T1 - A Review of European Sovereign Debt Crisis: Causes and Consequences
AU - G. M. Wali Ullah
AU - Samiul Parvez Ahmed
Y1 - 2014/04/20
PY - 2014
N1 - https://doi.org/10.11648/j.ijber.20140302.13
DO - 10.11648/j.ijber.20140302.13
T2 - International Journal of Business and Economics Research
JF - International Journal of Business and Economics Research
JO - International Journal of Business and Economics Research
SP - 66
EP - 71
PB - Science Publishing Group
SN - 2328-756X
UR - https://doi.org/10.11648/j.ijber.20140302.13
AB - This paper researched on the causes, current consequences and potential implication of the European debt crisis. The crisis was found to be a result of factors including international trade imbalances, the effects from the global crisis 2007-2012 and the failure in bailout approaches to cure Europe from the global financial distress. This has caused panic across the world due to the fact that negative financial situations in peripheral countries in Europe might further demolish the global financial markets. Even though significant growth was presumed from the introduction of Euro, the financial crisis resulted in sharp rise in bond yields, CDS, cross-correlation and spillover effects across bond markets of the Eurozone. Yield curves of the GIIPS countries acted as a cluster; differentiating from stronger and more stable economic forces. In addition, crisis resulted in significant dip of market confidence on Euro and depreciation of Euro against major currencies. Commodity prices i.e. spot price of gold rose to almost 300% over the time crisis period, utilized by governments as a defense mechanism against the economic downturns. Potential problems that might arise from this severe crisis and financial prospects of European states as well as governments over the world are also assessed and discussed
VL - 3
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Author Information

G. M. Wali Ullah

School of Business, Independent University, Bangladesh (IUB), Dhaka, Bangladesh
Samiul Parvez Ahmed

School of Business, Independent University, Bangladesh (IUB), Dhaka, Bangladesh

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APA Style

G. M. Wali Ullah, Samiul Parvez Ahmed. (2014). A Review of European Sovereign Debt Crisis: Causes and Consequences. International Journal of Business and Economics Research, 3(2), 66-71. https://doi.org/10.11648/j.ijber.20140302.13

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ACS Style

G. M. Wali Ullah; Samiul Parvez Ahmed. A Review of European Sovereign Debt Crisis: Causes and Consequences. Int. J. Bus. Econ. Res. 2014, 3(2), 66-71. doi: 10.11648/j.ijber.20140302.13

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AMA Style

G. M. Wali Ullah, Samiul Parvez Ahmed. A Review of European Sovereign Debt Crisis: Causes and Consequences. Int J Bus Econ Res. 2014;3(2):66-71. doi: 10.11648/j.ijber.20140302.13

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@article{10.11648/j.ijber.20140302.13,
  author = {G. M. Wali Ullah and Samiul Parvez Ahmed},
  title = {A Review of European Sovereign Debt Crisis: Causes and Consequences},
  journal = {International Journal of Business and Economics Research},
  volume = {3},
  number = {2},
  pages = {66-71},
  doi = {10.11648/j.ijber.20140302.13},
  url = {https://doi.org/10.11648/j.ijber.20140302.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20140302.13},
  abstract = {This paper researched on the causes, current consequences and potential implication of the European debt crisis. The crisis was found to be a result of factors including international trade imbalances, the effects from the global crisis 2007-2012 and the failure in bailout approaches to cure Europe from the global financial distress. This has caused panic across the world due to the fact that negative financial situations in peripheral countries in Europe might further demolish the global financial markets. Even though significant growth was presumed from the introduction of Euro, the financial crisis resulted in sharp rise in bond yields, CDS, cross-correlation and spillover effects across bond markets of the Eurozone. Yield curves of the GIIPS countries acted as a cluster; differentiating from stronger and more stable economic forces. In addition, crisis resulted in significant dip of market confidence on Euro and depreciation of Euro against major currencies. Commodity prices i.e. spot price of gold rose to almost 300% over the time crisis period, utilized by governments as a defense mechanism against the economic downturns. Potential problems that might arise from this severe crisis and financial prospects of European states as well as governments over the world are also assessed and discussed},
 year = {2014}
}

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