The paper "The Effect of Problems in the Euro Zone on International Business" is an outstanding example of a business report. This report aims at assessing the effect of problems in the Eurozone on international business. It introduces the client to the context and background of The Eurozone crisis. The report analyzes the impact of the crisis on local businesses; the impact of the crisis on local businesses; the impact of the crisis on shareholder value and the wealth of the most affected companies; and the short, medium and long term political influences which might affect business.
The findings are summarized and the results of the findings are analyzed and interpreted comprehensively. Recommendations on the measures that companies should take to caution against actual and potential business risks are given so as to assist McKinsey & Co clients with strategy creation in the Eurozone and in regions affected by the Eurozone crisis. 1. Introduction 1.1 The context The Eurozone crisis refers to a sovereign debt crisis in The European Union. It’ s a fiscal crisis that has made it impractical for some countries to refinance or repay their sovereign debt without being assisted by other countries or third parties.
The problem can be traced to The Maastricht Treaty of 1992 which was signed by member states of The European Union whereby they agreed to limit their debt levels and deficit spending (Smith 2012, P. 25). Trouble struck in the early 2000s when some members of The European Union failed to abide by the provisions of The Maastricht criteria and had to turn future government revenues into securities in order to reduce deficits and debts. The sovereign states sold their rights to future revenues which made it possible for them to earn revenue without violating the deficits and debts targets set in The Maastricht Treaty (Smith 2012, P.
26). The countries masked their debt and deficit levels through combining backdoor techniques such as off-balance sheet transactions.
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Smith, P., & Oreiro, J. (2012). The Financial Crisis Origins and Implications. Basingstoke, Palgrave Macmillan. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=729818, pp 25-35.