Exm PAU Ingles (cortado)

Mapping the European Debt Crisis

The European sovereign (1) debt crisis has been created by a combination of complex factors such as: the globalization of finance; easy credit conditions during the 2002-2008 period that encouraged high-risk lending and borrowing practices; international trade imbalances; real-estate (2) bubbles that have since burst; slow growth economic conditions 2008 and after; fiscal policy choices related to government revenues and expenses; and approaches used by nations to bailout (3) troubled banking industries and private bondholders (4), assuming private debt burdens or socializing losses.

Shortly after the announcement of the EU's new emergency fund for eurozone countries in early May 2010, Spain's government announced new austerity measures designed to further reduce the country's budget deficit. The Spanish government had hoped to avoid such deep cuts, but weak economic growth as well as domestic and international pressure forced the government to expand on cuts already announced in January. As one of the largest eurozone economies the condition of Spain's economy is of particular concern to international observers, and faced pressure from the United States, the IMF, other European countries and the European Commission to cut its deficit more aggressively.

Spain's public debt (5) was approximately U.S. $820 billion in 2010, roughly the level of Greece, Portugal, and Ireland combined.

1. Link each of the words/expressions below with a word/expression in the column (as numbered in the text). Copy the correct pair of words on your answer sheet. (1 mark)

investor housing pay out owing money national

(1) sovereign and ...

(2) real-estate and ...

(3) bailout and ...

(4) bondholder and ...

(5) debt and ...

5. What are the reasons for Spain to increase the cutbacks?

You are expected to draw information from the text, but please use your own words.

(50 words) (2 marks)

6. Governments should make the taxpayer pay for the sovereign debt. Say if you agree or disagree and explain why. Please, use your own ideas and your own words.

(50 words) (2 marks)

...