The European Debt Crisis. An Analysis and Evidence From the Macroeconomic Variables of the EU Members

Abstract

This article describes the current sovereign debt crisis of Greece, Ireland, Portugal and Spain, (GIPS). Using data from the International Monetary Fund, IMF, we illustrate the degree of the problem since the start of 2009. Macroeconomic indicators such as gross domestic product constant prices as percent change, general government net lending/borrowing as percent of GDP, general government net debt as a percent of GDP, unemployment rate, general government revenue as percent of GDP, general government total expenditure as percent of GDP, current account balance as percent of GDP, inflation end of period consumer prices as percent change, total investment as percent of GDP, gross national savings as percent of GDP, volume of imports of goods and services as percent change, volume of exports of goods and services as percent change would be used to show the violations from the Maastricht Treaty which was signed in 1992. The biggest problem was that the Treaty signed without taking into consideration the Greek Orthodox approach. This was the biggest mistake that resulted to magnify the debt and deficit among the EU countries. If there is no blessing from the Orthodox Church, then the decisions and the project will not be sustainable and successful for a long – period of time.