Europe's Big Debt

(Due Date - Tuesday 13th December, 2011 - Business Ethics)

 The European community, namely the European Union, has encountered a debt crisis recently, and is still going at it. In 1992, the European Union signed Maastricht Treaty stating that they will keep a limit on their deficit spending and debt levels. A number of E.U. states, such as Greece and Italy have broken those rules they've pledged to by masking their deficit and debt levels from the entire European community through the use of complex complex currency and credit derivatives structures.

I will be unable to describe in detail what the techniques were exactly, as I am unfamiliar with them. These techniques were created by prominent U.S. investment banks who received fees for their services in creating these structures for the E.U. community. They were legally protected when the crisis broke out publicly, and therefore avoided (for the time being) any charges towards them.

The European Union zone is a cluster of countries with high-debt percent.

Greece's gigantic leap.

The crisis itself is a result of violation of business ethics. The breaking of the Maastricht Treaty by numerous countries was the direct violation of business ethics. They sneakily masked their deficit and debt levels as explained above, and that alone has caused the downfall of an entire economy. There are two different violations, the breaking of the treaty is the violation of the treaty, and the act of actually masking the deficit and debt levels are the true business ethic violations. It is also how many of the countries that make up the E.U. actually used these techniques, but such countries that are heavily in debt right now, or were in debt that were part of the European Union were: Ireland, Greece, Portugal, Spain, Italy, France and Belgium. It is stated by the U.K. that the domino-effect of this crisis could easily spread to the United Kingdom, and that the U.K. should not rule out the fact they are at risk as well. In addition to that, the crisis has touched Switzerland and Iceland as well.

All the countries have now (2011) dropped way below 0 and into the negatives, especially those part of the European Union.