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07 December 2011


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RAKESH KUMAR  1088 sector -46 faridabad

euro zone debt crisis has been triggered due to excessive borrowing and over spending.the role of ECB was to check inflation and maintain foregin exchange reserve for each nation.ECB remained unaware of the debt going on for long time till the countries in the euro zone suffered on account of non-payment of debt. the banks in the affected countries became cash starved due to non-recovery of the loan given by them. as such banks and the government landed itself in the crisis. now if ECB do pump-priming it is likely that inflation would rise but if employment improves then the growth can be picked up. this should be done in small steps. how macro economic indicators react to the money supply needs to be seen over the period of 2-3 years. the early revivial of these economies is not possible. in addition the government should make fiscal union so that there can be check on extra spending. RAKESH KUMAR-1088/46 Faridabad

R. K. Arya, 203, Nalanda apartments, Sector-21C, faridabad

Greece people are not allowing their government to accept the bailout out package with a condition to put a check on austerity measure. The financial instituions ready to give bailout package have agrred for the hair cut as well as restructuing of the loan.But, no financail instituion how large it may be can not like to see that funds are wasted on spending on social welfare. in case spending cut is applied then people will topple the government which again will destabilise the euro zone. evenif the government wish to do something constructive to revive the sagging economy, the protest is inevitable. so under such circumstances the government and the people feel free to choose the course of action. so Greece should be allowed to leave the euro zone. but if Greece let the peole see the fall out of the exit from the euro zone. time frame may be set for decision to be taken. otherwise problem will linger on and global recovery will be delayed in defintely.as the solution offered to the Greece has been carefully worked out by EU, ECB and IMFas they have the limit to provide the bailout package, no better deal could be in sight.

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