Skip to main content

The Eurozone Debt crisis

I may not be a treasury specialist, but with the routine strategic planning on the swaps, forwards, derivatives, you kind of understand the factors that drive a movement in the currency. These may also be termed as the attributes that bring about the volatility in the currencies.

Over the last couple of years, euro zone debt crisis has been a much talked about thing and probably it has brought a global change... Let's get into some features of this crisis:

1. What do these crisis spell?

- the crisis have created the problem of debt burden to majority of the countries in the europe

- rising levels of private and government debt

- increasing yields over 6% that spell the concern of poor creditworthiness

-economic and trade imbalances

2. How did the crisis get evolved in some of the countries?

Broadly the crisis resulted from a blend of different economic factors, the globalization of finance, the easy credit conditions during the last decade, the international trade imbalances, real estate crisis and many more.

Some of the countries got into the mess for their own problems like:

1. Greece- increased commitment of government to public workers

2. Ireland- the banks in ireland lent money to service the property developers and stuck into bubble

3.Portugal- As a result of government's overspending and an over bureaucratic civil structure

4. Spain- increased government spending and no accumulation for debt

5. Cyprus- bond yields over 12%, poor credibility

6. Belgium- public debt over 100% of gdp

7. France- public debt is 83% of gdp, 2.1 usd trillion

8. UK- Highest gross foreign debt and leverage


no wonder the global markets have got connected and it all works like a single basket,all countries have got affected due to this crisis, and India is amongst one

How does India connects to Europe?

India's over the last couple of years is facing hard time due to these crisis, the depreciation of currency, poor credit rating and lack of fii interest are the major issues.

The Indian reliance on europe can be tracked on the following facts:

1. India is the 8th major importer to EU with total imports of euro - 39.3 billion. EU is the largest partner to India

2.Total exports from EU to India - 40.4 billion euros

3. India's reliance is high on europe for capital goods

4.The key industries in trade are - Agriculture, fuels and mining, chemicals, machinery, textile and others

5. The services trade goes to 10.7 billion euro of exports against 8.6 billion euro of imports (eu with India)

6. Fdi inflow to India from EU in 2010- 4.7 billion euro

With such the statistics, any poor response or failure in europe does effect the india scenario

Just an insight, ankit
Sent from my BlackBerryĀ® on the go
Apologies for typos

Comments

Popular posts from this blog

New Journey!!! - Plannin to write my blog

Well, I m no Amitabh Bachhan, No Aamir Khan, tht ppl will be reading my blog or will be finding it worth reading. All i know is tht i am getting inspired from Ankur to write it. This is my opening post meant to be read for ppl close to me.   Its 10:10pm now, September 25 th 2008 , I have decided to replicate the high flying Blogging concept whilst I know I have the slightest listeners. Holidays have started, No great work to do these days, except getting inclined to TV and gossips, ā€˜Roz ki faaltu baateinā€™ would be the core activity in my list regularly till 5 th October.   Will be missing my college buddies, Its always a dependence tht gets created when you meet the same ppl regularly, The best and worst part of ā€œChhutiyan-Holidaysā€™ is the ā€œending/missing of monotonous routineā€ , on one side I m happy tht this break would end up my daily 9 to 6 college routine and on the same time I will be / already started missing my friends and foes J . Tension mat lo, foes are an import...

Agriculture - Oxygen for manyyyy

Talking on agriculture, About 75% of the Indian population lives in rural areas and about 80% of this population is dependent on agriculture for its livelihood.Agriculture accounts for about 37% of the national income. The development of the rural areas and of agriculture and its allied activities thus becomes vital for the rapid development of the economy as a whole. Agricultural Productivity Even though India occupies the first or second position in the world in several crops in terms of area and production, it's rank in terms of productivity per hectare in the world is 52 for rice, 38 for wheat and much low in several other crops. The productivity of some crops is not only low but also remained stagnant over the years. The yield gap needs to be bridged through an integrated package of technology and agricultural policies to reap the untapped production potential, particularly, in rain-fed and other low productivity areas. What the INDIA INC says abt it? A...

Day #- 3- Blog's real test...

It is generally said tht any thing which is created has to pass thru certain tests... It was the day three for liveankit, the statistics and comments have to say many things, 370 hits , Lot more than yesterdays 186... , Dont worry , today i was xtreeemeeeeelllllllyyyy free, so around 100 hits would be mine....  RESPONSE SEEMS TO BE GOOD , THE STATS SAY SO, But it can be a fluke... any product when launched gets a curiousity response... The Real test has begun now... What matters is conversation, hw many ppl come again to blog? who all are writing comments? whether the blog is solving any purpose?? all these things are yet to tested and tried.. Writing a blog takes a lot from u, specially the time, so it is to be seen tht the blog is actually helpin anyone or it is just makin fun of time, news and designs... Well, i have a new poll too.. Its 09:30 PM IST ,  finally writing the last post of the day,we discussed abt the scenario of rupee depreciation, really a grreattt prob which the coun...