European debt crisis
The European debt crisis is a multi-year debt crisis, taking place in the European Union since the end of 2009. Several eurozone member states were unable to repay or refinance their government debt or to bail out over-indebted banks under their national supervision without the assistance of third parties like other eurozone countries, the European Central Bank, or the International Monetary Fund; the detailed causes of the debt crisis varied. In several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble; the structure of the eurozone as a currency union without fiscal union contributed to the crisis and limited the ability of European leaders to respond. European banks own a significant amount of sovereign debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing; as concerns intensified in early 2010 and thereafter, leading European nations implemented a series of financial support measures such as the European Financial Stability Facility and European Stability Mechanism.
The ECB contributed to solve the crisis by lowering interest rates and providing cheap loans of more than one trillion euro in order to maintain money flows between European banks. On 6 September 2012, the ECB calmed financial markets by announcing free unlimited support for all eurozone countries involved in a sovereign state bailout/precautionary programme from EFSF/ESM, through some yield lowering Outright Monetary Transactions. Return to economic growth and improved structural deficits enabled Ireland and Portugal to exit their bailout programmes in July 2014. Greece and Cyprus both managed to regain market access in 2014. Spain never received a bailout programme, its rescue package from the ESM was earmarked for a bank recapitalisation fund and did not include financial support for the government itself. The crisis has had significant adverse economic effects and labour market effects, with unemployment rates in Greece and Spain reaching 27%, was blamed for subdued economic growth, not only for the entire eurozone, but for the entire European Union.
As such, it can be argued to have had a major political impact on the ruling governments in 10 out of 19 eurozone countries, contributing to power shifts in Greece, France, Portugal, Slovenia, Slovakia and the Netherlands, as well as outside of the eurozone, in the United Kingdom. The eurozone crisis resulted from the structural problem of the eurozone and a combination of complex factors, including the globalisation of finance. In 1992, members of the European Union signed the Maastricht Treaty, under which they pledged to limit their deficit spending and debt levels. However, in the early 2000s, some EU member states were failing to stay within the confines of the Maastricht criteria and turned to securitising future government revenues to reduce their debts and/or deficits, sidestepping best practice and ignoring international standards; this allowed the sovereigns to mask their deficit and debt levels through a combination of techniques, including inconsistent accounting, off-balance-sheet transactions, the use of complex currency and credit derivatives structures.
From late 2009 on, after Greece's newly elected, PASOK government stopped masking its true indebtedness and budget deficit, fears of sovereign defaults in certain European states developed in the public, the government debt of several states was downgraded. The crisis subsequently spread to Ireland and Portugal, while raising concerns about Italy and the European banking system, more fundamental imbalances within the eurozone; the under-reporting was exposed through a revision of the forecast for the 2009 budget deficit from "6–8%" of GDP to 12.7% immediately after PASOK won the October 2009 Greek national elections. Large upwards revision of budget deficit forecasts due to the international financial crisis were not limited to Greece: for example, in the United States forecast for the 2009 budget deficit was raised from $407 billion projected in the 2009 fiscal year budget, to $1.4 trillion, while in the United Kingdom there was a final forecast more than 4 times higher than the original.
In Greece, the low forecast was reported until late in the year not corresponding to the actual situation. The fact that the Greek debt exceeded $400 billion and France owned 10% of that debt, made investors scared at the mention of the word "default". Although market reaction was rather slow—Greek 10-year government bond yield only exceeded 7% in April 2010—they coincided with a large number of negative articles, leading to arguments about the role of international news media and other actors fuelling the crisis; the European debt crisis erupted in the wake of the Great Recession around late 2009, was characterized by an environment of overly high government structural deficits and accelerating debt levels. When, as a negative r
Tertiary sector of the economy
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector, the primary sector; the service sector consists of the production of services instead of end products. Services include attention, access and affective labor; the production of information has long been regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector. The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, pest control or entertainment; the goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods, it is sometimes hard to define whether a given company is part and parcel of the secondary or tertiary sector.
And it is not only companies. In order to classify a business as a service, one can use classification systems such as the United Nations' International Standard Industrial Classification standard, the United States' Standard Industrial Classification code system and its new replacement, the North American Industrial Classification System, the Statistical Classification of Economic Activities in the European Community in the EU and similar systems elsewhere; these governmental classification systems have a first-level hierarchy that reflects whether the economic goods are tangible or intangible. For purposes of finance and market research, market-based classification systems such as the Global Industry Classification Standard and the Industry Classification Benchmark are used to classify businesses that participate in the service sector. Unlike governmental classification systems, the first level of market-based classification systems divides the economy into functionally related markets or industries.
The second or third level of these hierarchies reflects whether goods or services are produced. For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries; this shift is called tertiarisation. The tertiary sector is now the largest sector of the economy in the Western world, is the fastest-growing sector. In examining the growth of the service sector in the early Nineties, the globalist Kenichi Ohmae noted that: "In the United States 70 percent of the workforce works in the service sector; these are not busboys and live-in maids. Many of them are in the professional category, they are earning as much as manufacturing workers, more.”Economies tend to follow a developmental progression that takes them from a heavy reliance on agriculture and mining, toward the development of manufacturing and toward a more service-based structure. The first economy to follow this path in the modern world was the United Kingdom.
The speed at which other economies have made the transition to service-based economies has increased over time. Manufacturing tended to be more open to international trade and competition than services. However, with dramatic cost reduction and speed and reliability improvements in the transportation of people and the communication of information, the service sector now includes some of the most intensive international competition, despite residual protectionism. Service providers face obstacles selling services that goods-sellers face. Services are intangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them. Indeed, such as consultants and providers of investment services, offer no guarantees of the value for price paid. Since the quality of most services depends on the quality of the individuals providing the services, "people costs" are a high fraction of service costs. Whereas a manufacturer may use technology and other techniques to lower the cost of goods sold, the service provider faces an unrelenting pattern of increasing costs.
Product differentiation is difficult. For example, how does one choose one investment adviser over another, since they are seen to provide identical services? Charging a premium for services is an option only for the most established firms, who charge extra based upon brand recognition. Examples of tertiary industries may include: Telecommunication Hospitality industry/tourism Mass media Healthcare/hospitals Public health Pharmacy Information technology Waste disposal Consulting Gambling Retail sales Fast-moving consumer goods Franchising Real estate Education Financial services Banking Insurance Investment management Professional services Accounting Legal services Management consultingTransportation Below is a list of countries by service output at market exchange rates in 2016. Quaternary sector of the economy Indigo Era National Occupational Research Agenda Service Sector Council, USA Media related to Service industries at Wikimedia Commons
The euro is the official currency of 19 of the 28 member states of the European Union. This group of states is known as the eurozone or euro area, counts about 343 million citizens as of 2019; the euro is the second largest and second most traded currency in the foreign exchange market after the United States dollar. The euro is subdivided into 100 cents; the currency is used by the institutions of the European Union, by four European microstates that are not EU members, as well as unilaterally by Montenegro and Kosovo. Outside Europe, a number of special territories of EU members use the euro as their currency. Additionally, 240 million people worldwide as of 2018 use currencies pegged to the euro; the euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. As of August 2018, with more than €1.2 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world, having surpassed the U.
S. dollar. The name euro was adopted on 16 December 1995 in Madrid; the euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit at a ratio of 1:1. Physical euro coins and banknotes entered into circulation on 1 January 2002, making it the day-to-day operating currency of its original members, by March 2002 it had replaced the former currencies. While the euro dropped subsequently to US$0.83 within two years, it has traded above the U. S. dollar since the end of 2002, peaking at US$1.60 on 18 July 2008. In late 2009, the euro became immersed in the European sovereign-debt crisis, which led to the creation of the European Financial Stability Facility as well as other reforms aimed at stabilising and strengthening the currency; the euro is managed and administered by the Frankfurt-based European Central Bank and the Eurosystem. As an independent central bank, the ECB has sole authority to set monetary policy; the Eurosystem participates in the printing and distribution of notes and coins in all member states, the operation of the eurozone payment systems.
The 1992 Maastricht Treaty obliges most EU member states to adopt the euro upon meeting certain monetary and budgetary convergence criteria, although not all states have done so. The United Kingdom and Denmark negotiated exemptions, while Sweden turned down the euro in a 2003 referendum, has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements. All nations that have joined the EU since 1993 have pledged to adopt the euro in due course. Since 1 January 2002, the national central banks and the ECB have issued euro banknotes on a joint basis. Euro banknotes do not show. Eurosystem NCBs are required to accept euro banknotes put into circulation by other Eurosystem members and these banknotes are not repatriated; the ECB issues 8% of the total value of banknotes issued by the Eurosystem. In practice, the ECB's banknotes are put into circulation by the NCBs, thereby incurring matching liabilities vis-à-vis the ECB; these liabilities carry interest at the main refinancing rate of the ECB.
The other 92% of euro banknotes are issued by the NCBs in proportion to their respective shares of the ECB capital key, calculated using national share of European Union population and national share of EU GDP weighted. The euro is divided into 100 cents. In Community legislative acts the plural forms of euro and cent are spelled without the s, notwithstanding normal English usage. Otherwise, normal English plurals are sometimes used, with many local variations such as centime in France. All circulating coins have a common side showing the denomination or value, a map in the background. Due to the linguistic plurality in the European Union, the Latin alphabet version of euro is used and Arabic numerals. For the denominations except the 1-, 2- and 5-cent coins, the map only showed the 15 member states which were members when the euro was introduced. Beginning in 2007 or 2008 the old map is being replaced by a map of Europe showing countries outside the Union like Norway, Belarus, Russia or Turkey.
The 1-, 2- and 5-cent coins, keep their old design, showing a geographical map of Europe with the 15 member states of 2002 raised somewhat above the rest of the map. All common sides were designed by Luc Luycx; the coins have a national side showing an image chosen by the country that issued the coin. Euro coins from any member state may be used in any nation that has adopted the euro; the coins are issued in denominations of €2, €1, 50c, 20c, 10c, 5c, 2c, 1c. To avoid the use of the two smallest coins, some cash transactions are rounded to the nearest five cents in the Netherlands and Ireland and in Finland; this practice is discouraged by the Commission, as is the practice of certain shops of refusing to accept high-value euro notes. Commemorative coins with €2 face value have been issued with changes to the design of the national side of the coin; these include both issued coins, such as the €2 commemorative coin for the fiftieth anniversary of the signing of the Treaty of Rome, nationally i
Human Development Index
The Human Development Index is a statistic composite index of life expectancy and per capita income indicators, which are used to rank countries into four tiers of human development. A country scores a higher HDI when the lifespan is higher, the education level is higher, the GNI per capita is higher, it was developed by Pakistani economist Mahbub ul Haq, with help from Gustav Ranis of Yale University and Meghnad Desai of the London School of Economics, was further used to measure a country's development by the United Nations Development Program's Human Development Report Office. The 2010 Human Development Report introduced an Inequality-adjusted Human Development Index. While the simple HDI remains useful, it stated that "the IHDI is the actual level of human development", "the HDI can be viewed as an index of'potential' human development"; the index does not take into account several factors, such as the net wealth per capita or the relative quality of goods in a country. This situation tends to lower the ranking for some of the most advanced countries, such as the G7 members and others.
The index is based on the human development approach, developed by ul Haq framed in terms of whether people are able to "be" and "do" desirable things in life. Examples include—Being: well fed, healthy; the freedom of choice is central—someone choosing to be hungry is quite different from someone, hungry because they cannot afford to buy food, or because the country is in a famine. The origins of the HDI are found in the annual Human Development Reports produced by the Human Development Report Office of the United Nations Development Programme; these were devised and launched by Pakistani economist Mahbub ul Haq in 1990, had the explicit purpose "to shift the focus of development economics from national income accounting to people-centered policies". To produce the Human Development Reports, Mahbub ul Haq formed a group of development economists including Paul Streeten, Frances Stewart, Gustav Ranis, Keith Griffin, Sudhir Anand, Meghnad Desai. Nobel laureate Amartya Sen utilized Haq's work in his own work on human capabilities.
Haq believed that a simple composite measure of human development was needed to convince the public and politicians that they can and should evaluate development not only by economic advances but improvements in human well-being. Published on 4 November 2010, the 2010 Human Development Report calculated the HDI combining three dimensions: A long and healthy life: Life expectancy at birth Education index: Mean years of schooling and Expected years of schooling A decent standard of living: GNI per capita In its 2010 Human Development Report, the UNDP began using a new method of calculating the HDI; the following three indices are used: 1. Life Expectancy Index = LE − 20 85 − 20 LEI is 1 when Life expectancy at birth is 85 and 0 when Life expectancy at birth is 20.2. Education Index = MYSI + EYSI 2 2.1 Mean Years of Schooling Index = MYS 15 Fifteen is the projected maximum of this indicator for 2025. 2.2 Expected Years of Schooling Index = EYS 18 Eighteen is equivalent to achieving a master's degree in most countries.3.
Income Index = ln − ln ln − ln II is 1 when GNI per capita is $75,000 and 0 when GNI per capita is $100. The HDI is the geometric mean of the previous three normalized indices: HDI = LEI ⋅ EI ⋅ II 3. LE: Life expectancy at birth MYS: Mean years of schooling EYS: Expected years of schooling GNIpc: Gross national income at purchasing power parity per capita The HDI combined three dimensions last used in its 2009 Report: Life expectancy at birth, as an index of population health and longevity to HDI Knowledge and education, as measured by the adult literacy rate and the combined primary and tertiary gross enrollment ratio. Standard of living, as indicated by the natural logarithm of gross domestic product per capita at purchasing power parity; this methodology was used by the UNDP until their 2011 report. The formula defining the HDI is promulgated by the United Nations Development Programme. In general, to transform a raw variable, say x, into a unit-free index between 0 and 1 (which allo
Western Slovenia is one of the two NUTS-2 Regions of Slovenia. The region forms the western part of the country and includes the cities of Ljubljana, Koper and Nova Gorica, it is the richer of the two regions of Slovenia and its GDP per capita is 105.4% of the European Union average. Western Slovenia is divided into the following statistical regions: Central Slovenia Upper Carniola Gorizia Coastal–Karst
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys services; the measure of inflation is the inflation rate, the annualized percentage change in a general price index the consumer price index, over time. The opposite of inflation is deflation. Inflation affects economies in various negative ways; the negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include reducing unemployment due to nominal wage rigidity, allowing the central bank more leeway in carrying out monetary policy, encouraging loans and investment instead of money hoarding, avoiding the inefficiencies associated with deflation.
Economists believe that the high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth. Today, most economists favor a steady rate of inflation. Low inflation reduces the severity of economic recessions by enabling the labor market to adjust more in a downturn, reduces the risk that a liquidity trap prevents monetary policy from stabilizing the economy; the task of keeping the rate of inflation low and stable is given to monetary authorities. These monetary authorities are the central banks that control monetary policy through the setting of interest rates, through open market operations, through the setting of banking reserve requirements.
Rapid increases in the quantity of money or in the overall money supply have occurred in many different societies throughout history, changing with different forms of money used. For instance, when gold was used as currency, the government could collect gold coins, melt them down, mix them with other metals such as silver, copper, or lead, reissue them at the same nominal value. By diluting the gold with other metals, the government could issue more coins without increasing the amount of gold used to make them; when the cost of each coin is lowered in this way, the government profits from an increase in seigniorage. This practice would increase the money supply but at the same time the relative value of each coin would be lowered; as the relative value of the coins becomes lower, consumers would need to give more coins in exchange for the same goods and services as before. These goods and services would experience a price increase. Song Dynasty China introduced the practice of printing paper money to create fiat currency.
During the Mongol Yuan Dynasty, the government spent a great deal of money fighting costly wars, reacted by printing more money, leading to inflation. Fearing the inflation that plagued the Yuan dynasty, the Ming Dynasty rejected the use of paper money, reverted to using copper coins. Large infusions of gold or silver into an economy led to inflation. From the second half of the 15th century to the first half of the 17th, Western Europe experienced a major inflationary cycle referred to as the "price revolution", with prices on average rising sixfold over 150 years; this was caused by the sudden influx of gold and silver from the New World into Habsburg Spain. The silver spread throughout a cash-starved Europe and caused widespread inflation. Demographic factors contributed to upward pressure on prices, with European population growth after depopulation caused by the Black Death pandemic. By the nineteenth century, economists categorized three separate factors that cause a rise or fall in the price of goods: a change in the value or production costs of the good, a change in the price of money, a fluctuation in the commodity price of the metallic content in the currency, currency depreciation resulting from an increased supply of currency relative to the quantity of redeemable metal backing the currency.
Following the proliferation of private banknote currency printed during the American Civil War, the term "inflation" started to appear as a direct reference to the currency depreciation that occurred as the quantity of redeemable banknotes outstripped the quantity of metal available for their redemption. At that time, the term inflation referred to the devaluation of the currency, not to a rise in the price of goods; this relationship between the over-supply of banknotes and a resulting depreciation in their value was noted by earlier classical economists such as David Hume and David Ricardo, who would go on to examine and debate what effect a currency devaluation has on the price of goods. The adoption of fiat currency by many countries, from the 18th century onwards, made much larger variations in the supply of money possible. Rapid increases in the money supply have taken place a number of times in countries experiencing political crises, produ
Austria the Republic of Austria, is a country in Central Europe comprising 9 federated states. Its capital, largest city and one of nine states is Vienna. Austria has an area of 83,879 km2, a population of nearly 9 million people and a nominal GDP of $477 billion, it is bordered by the Czech Republic and Germany to the north and Slovakia to the east and Italy to the south, Switzerland and Liechtenstein to the west. The terrain is mountainous, lying within the Alps; the majority of the population speaks local Bavarian dialects as their native language, German in its standard form is the country's official language. Other regional languages are Hungarian, Burgenland Croatian, Slovene. Austria played a central role in European History from the late 18th to the early 20th century, it emerged as a margraviate around 976 and developed into a duchy and archduchy. In the 16th century, Austria started serving as the heart of the Habsburg Monarchy and the junior branch of the House of Habsburg – one of the most influential royal houses in history.
As archduchy, it was a major component and administrative centre of the Holy Roman Empire. Following the Holy Roman Empire's dissolution, Austria founded its own empire in the 19th century, which became a great power and the leading force of the German Confederation. Subsequent to the Austro-Prussian War and the establishment of a union with Hungary, the Austro-Hungarian Empire was created. Austria was involved in both world wars. Austria is a parliamentary representative democracy with a President as head of state and a Chancellor as head of government. Major urban areas of Austria include Graz, Linz and Innsbruck. Austria is ranked as one of the richest countries in the world by per capita GDP terms; the country has developed a high standard of living and in 2018 was ranked 20th in the world for its Human Development Index. The republic declared its perpetual neutrality in foreign political affairs in 1955. Austria has been a member of the United Nations since 1955 and joined the European Union in 1995.
It is a founding member of the OECD and Interpol. Austria signed the Schengen Agreement in 1995, adopted the euro currency in 1999; the German name for Austria, Österreich, derives from the Old High German Ostarrîchi, which meant "eastern realm" and which first appeared in the "Ostarrîchi document" of 996. This word is a translation of Medieval Latin Marchia orientalis into a local dialect. Another theory says that this name comes from the local name of the mountain whose original Slovenian name is "Ostravica" - because it is steep on both sides. Austria was a prefecture of Bavaria created in 976; the word "Austria" was first recorded in the 12th century. At the time, the Danube basin of Austria was the easternmost extent of Bavaria; the Central European land, now Austria was settled in pre-Roman times by various Celtic tribes. The Celtic kingdom of Noricum was claimed by the Roman Empire and made a province. Present-day Petronell-Carnuntum in eastern Austria was an important army camp turned capital city in what became known as the Upper Pannonia province.
Carnuntum was home for 50,000 people for nearly 400 years. After the fall of the Roman Empire, the area was invaded by Bavarians and Avars. Charlemagne, King of the Franks, conquered the area in AD 788, encouraged colonization, introduced Christianity; as part of Eastern Francia, the core areas that now encompass Austria were bequeathed to the house of Babenberg. The area was known as the marchia Orientalis and was given to Leopold of Babenberg in 976; the first record showing the name Austria is from 996, where it is written as Ostarrîchi, referring to the territory of the Babenberg March. In 1156, the Privilegium Minus elevated Austria to the status of a duchy. In 1192, the Babenbergs acquired the Duchy of Styria. With the death of Frederick II in 1246, the line of the Babenbergs was extinguished; as a result, Ottokar II of Bohemia assumed control of the duchies of Austria and Carinthia. His reign came to an end with his defeat at Dürnkrut at the hands of Rudolph I of Germany in 1278. Thereafter, until World War I, Austria's history was that of its ruling dynasty, the Habsburgs.
In the 14th and 15th centuries, the Habsburgs began to accumulate other provinces in the vicinity of the Duchy of Austria. In 1438, Duke Albert V of Austria was chosen as the successor to his father-in-law, Emperor Sigismund. Although Albert himself only reigned for a year, henceforth every emperor of the Holy Roman Empire was a Habsburg, with only one exception; the Habsburgs began to accumulate territory far from the hereditary lands. In 1477, Archduke Maximilian, only son of Emperor Frederick III, married the heiress Maria of Burgundy, thus acquiring most of the Netherlands for the family. In 1496, his son Philip the Fair married Joanna the Mad, the heiress of Castile and Aragon, thus acquiring Spain and its Italian and New World appendages for the Habsburgs. In 1526, following the Battle of Mohács, Bohemia and the part of Hungary not occupied by the Ottomans came under Austrian rule. Ottoman expansion into Hungary led to frequent conflicts between the two empires evident in the Long War of 1593 to 1606.
The Turks made incursions into Styria nearly 20 times, of which some are c