Essays on Government Business Relations - International Monetary Fund Case Study

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The paper "Government Business Relations - International Monetary Fund" is a perfect example of a business case study.   Greece is in a fixed economic situation as things stand. Its economic woes are as a result of inefficient and less productive public sector and a financial model that is distorted and based on consumption funded by the public sector. This problem seems to be part of the larger crisis of sovereign debt that is being experienced in the Eurozone (International Monetary Fund, 2013). Quite a number of attempts have been made to solve the economic problems of Greece in particular with International corporations like IMF and European Union is involved.

However, these corporations will not help in solving the economic problems of Greece. This essay will explain why international corporation involvement in Greece economic crisis will not solve the prevailing economic problems. Greece is particularly in a peculiar position given that they have the largest public deficit in the entire Eurozone making it the centre of all economic crisis (Affairs Dept, 2013). It was the first country from the Eurozone member states to have come under high marketing pressure and also the first country to turn to IMF and Eurozone members' countries for financial help (Belkin & Mix, 2011., p 1).

Greece had a large debt problem even before it joined the European Union and before the credit crisis. The credit crisis worsened the already bad economic state of Greece making it primarily uncompetitive (Pettinger, 2014). So far, Greece is yet to recover fully with the involvement of these international corporations. It is also understood that the economic plight of Greece is contributed to by the European Union through its policies and corporations that have resulted in the introduction of common currency among members states.

This has prompted a series of reactions from economists with most of them urging Greece to withdraw its membership in the European crisis. The role of the European Union is also criticized due to the ever-deepening democratic deficit thriving in Europe with the use of strict rules (Bitros & Karayiannis, 2013, p. 196). However, the active involvement of the IMF elicited many questions (Thomas & Franz, 2012, p.

1). Some were asking the reason for the participation of the International Monetary Fund in the whole rescue program. Others saw the involvement of IMF as a strong indication that European Union cannot solve their economic problems or rather, they wanted to utilize the IMF's outstanding proficiency in elaboration and monitoring of economic adjustment programs with conditionality. IMF lending programs are regularly linked to the sharp and sustained redirection of economic course despite the variance in objectives and duration exhibited by these programs (Thomas & Franz, 2012, p. 1). The IMF involvement was allowed and primarily taken as the last option of exit since all other opportunities had been exhausted (Thomas & Franz, 2012, p.

9). The problem that prevented the European Union from effectively assisting Greece and allowing the IMF to get involved was that the EU treaty was insufficient or not followed. Secondly, the EU as an institution lacked credibility and the necessary expertise to handle severe national fiscal problems (Aristidis Bitzenis, 2013, p. 196) (Aristidis et al. , 2013,p. 196). The IMF involvement was also fuelled by the influence of big economies like the US, who feared that this crisis can spread to the United States (Belkin & Mix, 2011., p 1).

It is important to note that most of the decisions that were made by European Union members' states to allow for the incorporation of IMF clearly show that this body cannot help Greece survive the economic turmoil it is struggling with. European Union has got very limited experience with it the balance of payments facility that provides medium-term assistance in terms of finance to non-European Countries (Thomas & Franz, 2012, p.

9). As opposed to European Union, IMF is an international body that has got reputation and experience of more than 60 years of lending money as well as fostering reorganizations to help nations in balancing of payment problems with other financial crises (Thomas & Franz, 2012, p. 10).

References

Affairs Dept, I. 2013. Greece. Washington: International Monetary Fund.

Aristidis Bitzenis, A. ,. P. I. a. V. A. V., 2013. Reflection on Greek Sovereign Debt Crisis: The EU Institutional framework, Economic Adjustment in an Extensive Shadow Economy. 1 ed. Newcastle: Cambridge Scholars Publishers.

Belkin, P. &. M. E. D., 2011. Greece’s Debt Crisis: Overview, Policy , Washington: Congressional Research Service .

BIBLIOGRAPHY Chris, R., 2012. The IMF and European Economies: Crisis and Conditionality. 1 ed. New York: Palgrave Macmillan.

Bitros, G. C. &. A. D. K., 2013. Creative Crisis in Democracy and Economy.. Berlin: Springer Science & Business Media.

International Monetary Fund, 2012. Greece: Request for Extended Arrangement Under the Extended Fund Facility, Washington DC: International Monrtary Fund Publication Services.

International Monetary Fund,. 2013. Greece: 2013 Article IV Consultation. IMF Staff Country Reports, 13(154), 1. doi:10.5089/9781484358511.002

International Monetary Fund.,. 2011. Greece. [Place of publication not identified]: International Monetary Fu.

Marjolein, V., 2013. Greece and the Crisis of Europe: Which Way Out?. [Online]

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Nicole, S., 2012. Democracy in a state of emergency: Greece, the EU and the eurozone debt crisis. [Online]

Available at: https://www.opendemocracy.net/nicole-scicluna/democracy-in-state-of-emergency-greece-eu-and-eurozone-debt-crisis

[Accessed 4 May 2014].

Pettinger, T., 2014. Euro Debt Crisis Explained. [Online]

Available at: http://www.economicshelp.org/blog/3806/economics/euro-debt-crisis-explained/

[Accessed 4 May 1025].

Ronald, J., 2010. Greece and the IMF: Who Exactly is Being Saved?, Washington, D.C. : Center for Economic and Policy Research.

Thomas, S. F. &. J., 2012. The Role of the IMF in The European Debt Crisis. HAW im Dialog-Weidener Diskussionspapiere., Volume 32, p. 36.

Verleger, P. 2011. Oil exporters to the Euro's rescue?. Washington, D.C.: Peterson Institute for International Economics.

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