Analyze Assignment Example | Topics and Well Written Essays - 500 words

Analyze - Assignment Example In this case, Greece would have to suffer because of the ideological misconception fostered by the Economic and Monetary Union. This is the belief that possession of hard money can drive smaller economies to grow and march other developed economies. This revelation would influence Greece to opt out of the Economic and Monetary Union. Consequently other smaller European nations not wanting to suffer under similar programs would opt out of the Union too leading to instability (Sēmitēs, Stiakaki, & Munro, 2014). On the other hand, if Greece were to fail to take the austerity measures and firmly hold against repayment, the countries credit rating would further plunge downwards. Sanctions against it by bodies such as the World Bank, The International Monetary Fund and the European Union would have drastically impacted on its economic prospects. Such political sanction intended to pressurize Greece into meeting its obligations of loan repayments would grossly affect its trade relations with other European nations. The country would neither be in a position to trade with its European neighbors nor borrow fund to meet its budget deficits. There would increase tension in Europe as other countries like Italy who are equally burdened by heavy debts would dread the possibility of undergoing similar troubles. Instability in the European economy would be eminent as other countries equally burdened with debts would be anticipated to follow in Greece’s footsteps. The eminent exit of Greece from the euro would be catastrophic. The Greek economy would be returned and stagnated. The countrywould have get back to production of its old currency and set up its own central bank. The European Central Bank would be left holding an enormous Greek debt with limited options. The devaluation of the euro which would result from such a scenario would consequently results