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GREEK SOVEREDEBT CRISIS

COMPETENCES OF TEUROPEAN UN

By Yordan and

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Contents

I. European Competence and Greeksovereign debt crisis

II. Infringement of Maastricht Treaty?III. Conclusion

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PIGS Sovereign Debt Crisis

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Maastricht Treaty

Maastricht Criteria

The ratio of gross government debt to GDP must not exceed 60% at the end of the

preceding fiscal year.

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Infringement?

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The Great Contradiction

Greece's economy has struggled since the country joined the euro in2001. In 2004, it admitted its budget deficit was higher than allowedunder rules of entry.

Greeces debt to GDP was 103.7% at the time,

compared to the Maastricht Treaty cap set at 60%.

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European Unions Competence

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EU?

The Eurozone stick to explicit fiscalrules.The principle rules are:the annual deficit must be kept below 3 per cent

of GDPover the medium term the budgetary position of each member of the eurozone should be closeto balance or in surplus overall public debt must not be larger than 60per cent of GDP.

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EU?

Article 103 of the Maastricht Treaty stipulates that neither theCommunity nor any Member State is liable for or can assume thecommitments of any other Member State.

The Community shall not be liable for or assume the commitments of central

governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutufinancial guarantees for the joint execution of a specific project. A Member State shnot be liable for or assume the commitments of central governments, regional, locaother public authorities, other bodies governed by public law, or public undertakinganother Member State, without prejudice to mutual financial guarantees for the joinexecution of a specific project.

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EU?

Article 100, section 2 ( bail-out clause Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control Council, acting by a qualified majority on a proposal fromthe Commission, may grant, under certain conditions,Community financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken .

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Is it illegal to drop Greece from EThe Lisbon Treaty formally introduced a new exit clause

Article 50 TEUThe Treaties are silent on exit from the Euro.

Greece could not exit the Eurowithout exiting the EU as a

whole.

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Thank you for your attention