THE EFFECTS OF EUROPEAN MONETARY UNION IMPLEMENTATION IN GREECE CRISIS (2008 – 2012)

Abstract

The establishment of European Monetary Union (EMU) has faced the obstacles with the appearance of Global financial crisis in 2008 that has exposed the weaknesses of international monetary system and spread fast the effects globally, especially in the European region. The EMU is seen as instrumental for the European Union (EU) that has brought the goals of the Community to have internal single market with the single monetary policy, the creation of the single currency, the euro, that would conducted by the single institution which European Central Bank and along with the coordination of macroeconomic policies within the member countries. However, as the EMU has been implemented, it provided the interrelations among the member countries in the economy and emerged the cost of its implementation among the member countries through the emergence of global financial crisis, especially Greece as the country which most affected and has facing the serious crisis after joining the EMU in 2001. Thus, the research question is how were the effects of EMU implementation in contributing to Greece crisis (2008-2012). This research used qualitative methods with descriptive type of the research. This research aims to examine the effects of EMU implementation in Greece, in the period of 2008-2012. In analysing the issue, this research is used liberalism theory, economic integration theory and the optimum currency area theory. The research discovered several effects of EMU implementation in Greece for the period of 2008-2012, such as fluctuating of budget deficit and public debt, reduce Greece economy’s credibility in international market, the slowdown of economy growth and increasing of unemployment rates.