Countries in the European Economic Community (EEC) have suffered in the recession. Select one of the EEC countries and imagine you were the Prime Minister of that country. Write an essay in three parts:
(A) history of the current economic crisis in that country;
(B) the current tourist economic situation and
(C) what you would do in the future to activate tourism if you remained as Prime Minister.
You should use relevant economic ideas to develop your arguments clearly and logically.
1 Understanding: the underlying causes of the recession
25
2 Understanding of the current situation with regard to tourism supply and demand
25
3 Your ideas for regenerating the tourism industry
30
4 Spelling, grammar, presentation
10
5 Correct referencing (using Harvard)
10
When inflation started to rise by more than 10 %, in the 1970’s, the Americans have been declared public enemy number one. Although it is well known that the prices are going up over time, most people do not know too much about forces that are behind this phenomenon. Inflation is defined as a sustained increase, over time, in the prices of goods and services and is measured as an annual increase in percent. As the inflation rate increases, each monetary unit will buy a smaller quantity of goods and services. Actual value of coins will never stay constant. It is established by the purchasing power, on how many goods and services can be purchased. When inflation rises, the purchasing power decreases. If, for example, the inflation rate is 5% per year, a product that costs 100 lei, over one year will cost 105 lei (Boboc, 2013).
The Euro zone recession started in year 2008 and it has had a severe impact on the tourism industry for central and east-European countries; Poland, Slovakia, and Romania being the most affected ones. Romania’s economy is categorised as an upper-middle wages market that is currently developing. “Is the 17th largest in the EU by GDP and the 13th largest based on purchasing power parity“(Wikipedia, 2014).
In 2009 Romania’s president, publicly announced that the country was officially in recession. After 9 years of consecutive growth, the GDP dropped to -6.4% in the first trimester of 2009, due to bad performance of industry, quality of service, lending, and domestic consumption. The economic decline headed towards government tightening fiscal policies, drop in production, and reduce in spending and wages, and negative revenue to the state’s budget. Romania had to focus more on the economic growth than on curbing inflation, resulting diminishes in the interest rate by the central bank.
In 2009, Romania borrowed 20 bn. euro from International Monetary Fund, EU, World Bank and other international financial organisations, paying back an annual interest rate of 3.5%. In return, Romania had to reduce spending and wages. Some of the impacts being: 25% cut in the government civil servants earnings, thousands of people left without jobs and the VAT increased by 5% to 24%.
Recession is caused by decline in production, investment, business, and the economic activity of a country.
It is represented through a decrease of GDP, population income, number of paid jobs, industrial production, and retail, and wholesale (Wikipedia, 2014). With recession reducing disposable income, people were forced to reduce spending, especially for travel. The most impacted segment for Romania’s tourism was outbound tourism. The tourists reduced their spending by 30% from 460 million euro in 2008 to 310 million euro 2011. Domestic tourism had been affected at the same time by 11%, from 1.01 bn. euro in 2008 to 900 euro 2011. Same study showed that the tourism industry contributes with approximately six bn. euro to Romania’s GDP. Although comparing to other countries, this is still a small contribution. Tourism is one of the most profitable businesses worldwide, that does not pollute, creates jobs, and generates foreign currency. The revenue that tourism industry generates has
Related Documents: Essay about Romania in recession
states that are located primarily in Europe. The European Union is a society in which people come together in order to keep peace and security within their nations. The Union was officially founded in 1935 by 5 countries. “Germany, France, Italy, Romania, and Sweden.” The sole purpose of the European Union is to create a united Europe and to allow freedom of movement and enterprise mainly amongst the unions members. Brief historic events of the European Union: The idea of EU citizenship was first…
studies were analyzed to see if each would bring about the same conclusions and if the conclusions were different from my two common factors. The first study from Individual Behavior Change Through Economic Shocks Exposure: Empirical Evidence from Romania, addressed economic, terrorism, and public health security crisis. These studies provided information that would help determine factors for various crimes such as murder, domestic violence, and suicide. The social consequence of economic crisis was…
Professor Kahler English 111 November 5th 2012 Legalization of Marijuana The word “marijuana” is an ear raiser in almost every Michigan household today. People who oppose legalizing the use of marijuana commonly believe its use is to smoke the plant, and those that do not choose to use marijuana tend to want to keep it illegal. Diverse views on decriminalization of marijuana has caused a lot of turmoil over the past half-century and still remains a hot topic in today's society. There have…
History: DM US role in Europe at the beginning of the Cold war a) Outline what is meant by « the Truman doctrine ». Support your response with evidence from document A. Harry Truman, an anti-communist American President introduced the Truman doctrine after Franklin D. Roosevelt’s mandate. The creation of this doctrine was linked to the “Long Telegram” sent by George Kennan (U.S ambassador to the U.S.S.R. in 1946) to Truman as the President came to believe that virtually all actions against…
The European Union (EU) is the world’s largest economic and trading area. “The US has the world’s largest economy; in 2012 it produced $15.66 trillion versus the $15.63 trillion in the EU. In 2007 the EU became the largest economy in the world and held that position until 2012. ”1 The EU’s unique asset and distinct comparative advantage on the global scene is its Single Market, which encompasses over half a billion consumers and more than 20 million firms. The Single Market (sometimes called the…
the Republic of Turkey, is located at the northeast end of the Mediterranean Sea in southeast Europe and southwest Asia. It is south of the Black Sea and west of the Aegean Sea. Turkey neighbors Greece and Bulgaria on the west, Russia, Ukraine, and Romania to the north and northwest Georgia, Armenia, Azerbaijan and Iran to the east. Syria and Iraq is south of Turkey. Turkey expands across both Europe and Asia. The total area of the land is about 779, 452 km, which 97 percent of it is in Asia and the…
Tiffany Prill Challenges of Leadership Leadership Book Analysis Modern World Leaders- Angela Merkel The person chosen for this leadership report is Angela Merkel. I read “Modern World Leaders-Angela Merkel” written by Clifford W. Mills. Being born in Berlin, with my pride in being German, as well as being a female with my own leadership ambitions, I felt Angela Merkel was a perfect fit for me. Gaining knowledge on the leadership style from one of the most powerful and influential women in…
Cold War Era Not since Teddy Roosevelt, does the book spend so much time profiling a candidate and President. And well it should. Ronald Reagan changed the course of the U.S. from where you left off in the last chapter (poor self-esteem from recession, Americans held hostage in Iran, oil woes, Soviet invasion of Afghanistan), and brought on what you know today as “the Right Wing” (back then, “The New Right”) and the current conservative Republican Party. Carefully read pages 966 & 967 to fully…
strong foreign policy, “voodoo” economics and a robust, though controversial, domestic agenda. He would lead our country from famine to feast in the 1980’s, guiding the U.S. through a recession and a resurgence in the economy and the stock market. The 1970s closed on sour notes. The economy was mired in a deep recession, with little hope in sight for recovery. Fifty-two hostages were still being held in Iran, and the U.S. seemed powerless to do anything about it. Although President Carter was re-nominated…
The birth of the SEM occurred under unusual circumstances and this environment is responsible for much of the structure the EU has right now. The decade of the 80’s was marked by economic instability. The early 1980’s were comprised by a deep recession that created problems such as unemployment, stagnation of the GDP but also permeated a sense of fragmentation. (Ballew and Schnorbus, 1993) This period known as Eurosclerosis was drowning expectations from politicians, academics and even the common…