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    IMF: Financial Assistance

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    Within the past decade, the IMF has provided financial assistance (bailout) to Greece (2010, 1st quarter), Iceland (2008, 4th quarter), Ukraine (2014, 2nd quarter), and Hungary (2008, 4th quarter). Describe the recovery process in each country as a result of this assistance. Also determine whether or not there was an increase/decrease in:
     GDP,
     inflation, and
     unemployment.

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    Solution Preview

    Step 1
    Greece bailout (2010 1st quarter)
    The bailout of Greece by IMF has not been successful. The financial problems of Greece have increased till date. There have been suggestions that Greece exit from the European Union because it has not been able to repay its debt. The assistance by IMF has only increased the debt burden of Greece. Since the bailout the GDP of Greece has declined. It was 226 EUR billion in 2010, 208 EUR billion in 2011, 194 EUR billion in 2012, and 182 EUR billion in 2013. The inflation has declined from 5.2% in 2010 to -2.5 in 2014. The unemployment rate has increased from 12.7% in 2010 to 26.6% in 2014. These statistics show that Greek economy has not recovered.

    Step 2
    Iceland bailout (2008, 4th quarter)
    The Iceland bailout in 2008 by the IMF has been ...

    Solution Summary

    This solution explains the impact of financial assistance provided by IMF. The sources used are also included in the solution.