Heat of Fusion Example Problem - Melting Ice

Heat of fusion is the amount of heat energy required to change the state of matter of a substance from a solid to a liquid. Its also known as enthalpy of fusion. Its units are usually Joules per gram (J/g) or calories per gram (cal/g). This example problem demonstrates how to calculate the amount of energy required to melt a sample of water ice. Key Takeaways: Heat of Fusion for Melting Ice Heat of fusion is the amount of energy in the form of heat needed to change the state of matter from a solid to a liquid (melting.)The formula to calculate heat of fusion is: q m ·ÃŽâ€HfNote that the temperature does not actually change when matter changes state, so its not in the equation or needed for the calculation.Except for melting helium, heat of fusion is always a positive value. Example Problem What is the heat in Joules required to melt 25 grams of ice? What is the heat in calories? Useful information: Heat of fusion of water 334 J/g 80 cal/g Solution ï » ¿In the problem, the heat of fusion is given. This isnt a number youre expected to know off the top of your head. There are chemistry tables that state common heat of fusion values. To solve this problem, youll need the formula that relates heat energy to mass and heat of fusion:q m ·ÃŽâ€Hfwhereq heat energym massΔHf heat of fusion Temperature is not anywhere in the equation because it doesnt change when matter changes state. The equation is straightforward, so the key is to make sure youre using the right units for the answer. To get heat in Joules:q (25 g)x(334 J/g)q 8350 JIts just as easy to express the heat in terms of calories:q m ·ÃŽâ€Hfq (25 g)x(80 cal/g)q 2000 calAnswer: The amount of heat required to melt 25 grams of ice is 8,350 Joules or 2,000 calories. Note: Heat of fusion should be a positive value. (The exception is helium.) If you get a negative number, check your math.

Psychosis, Paranoia And Schizophrenia Spectrum Disorder Essay

The world is being affected by the psychological disorder Schizophrenia every day. The disease itself can be traced back to the second millennium before Christ. Schizophrenia can be diagnosis using Dr. Eugen Bleuler â€Å"positive† and â€Å"negative† symptoms. Schizophrenia is â€Å" a psychotic disorder characterized by loss of contact with the environment, by noticeable deterioration in the level of functioning in everyday life, and by disintegration of personality expressed as disorder of feeling, thought (as delusion), perception (as hallucinations) and behavior (demetia praecox) or contradictory or antagonistic qualities or attitudes (Merrium Webster). There are several types of this disease however, I will only discuss three: Psychosis, Paranoia and Schizophrenia-Spectrum Disorder. Over the years of study on how to treat Schizophrenia there are known first and second generation anti-psychotics and therapies available. Schizophrenia is an important problem in the world and many people need help. Schizophrenia is a mind/bind psychological disorder that affects 1% of the world population during their lifetime (Okami 652). In 1887 a German physician, Dr. Emile Kraepelin was the first to compare the different symptoms by looking at the biological and genetic malfunction to identify the chief origin of the disease which he called â€Å"Dementia praecox†. The term dementia praecox was relabeled to be called Schizophrenia by a Swiss psychiatrist, Dr. Eugen Bleuler in 1907. 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Taxation Law Work Related Expenses

Question: Describe about the Taxation Law for Work Related Expenses. Answer: 1:- For the Australian residents the incomes, earned from all direct and indirect sources within or outside Australia, are considered as the assessable income. Any income generated from the sale of property by any Australian resident, therefore, should be treated as an assessable income of the individual resident (Woellner et al. 2012). However, under ITAA 1997, the assessable incomes are classified into two sections ordinary income and statutory income. Ordinary incomes can be described as the incomes, generated from ordinary or general course of action. Under section 6-5, the main ordinary incomes are stated below: Income from personal exertion, such as, salary, wages, leave encashment, monthly pension etc. Income from property, such as, rent from properties, interest on deposits, dividend from investments etc. Income from business, such as, net profit from business, sale of trading stocks, net income from farming etc (www.dlsweb.rmit.edu.au, 2016) On the other hand, statutory incomes can be defined as the income, which has not been generated from ordinary courses. These incomes, as described in the section 10-5, are described below: Capital gains from sale of capital assets Lump Sum payment, received on termination of employment Bonus on Insurance Bad Debts recovered Profit from Barter transaction Royalties Imputation credit (www.dlsweb.rmit.edu.au, 2016) The statutory incomes are calculated separately to determine the taxable amount from such incomes. Peta, had purchased the house with tennis court for living in the house permanently and to earn profits by selling the tennis courts in units. However, she sold the whole tennis court later to a tennis club. The income from the sale of the tennis court is surely an assessable income. Peta had purchased the property with an intention to sale the tennis courts for earning profits. Therefore, the net income, after deducting the expenses, incurred for resurfacing and fencing, can be considered as business income. In that case, it can be included as an ordinary income of Peta under section 6-5 (Austlii.edu.au, 2016). However, it should be noted that though Peta had an intention to sale the property, she did not involve in any kind of real estate business. Apart from that, she had intended to sell the property in small units, but had to sell it in a whole. Hence, the income from the sale of the property should be considered as statutory income under section 10-5, instead of, ordinary income. Moreover, if Peta would show the income as ordinary income, then she has to pay tax on the net income, by deducting the cost price and other expenses, incurred for the assets. However, if it is shown as capital gain, she can claim for 50% exemption on the net income (Ato.gov.au, 2016). Therefore, from both the point of views, the receipt of $600000 should not be considered as an ordinary income under section 6-5. 2:- It is necessary to made the following assumptions for ascertaining the Fringe Benefit Tax liability of ABC Pty. Ltd. on the expenses, made for Alan:- Salaries and wages, paid to the employees, are not considered for FBT and therefore, the salary of Alan will not be included for FBT liability computation (Bender et al. 2013). Mobile phone bill, paid by the employer, on behalf of employee, is treated as expense fringe tax benefit. ABC Pty. Ltd. has not reimbursed the mobile phone expenses to Alan, but paid to the third party directly. Though, the monthly mobile expenses is lower than $300, but annually the expense ins amounted to $2640. Therefore, ABC Pty. Ltd. can consider the mobile expense for fringe tax benefit (Ato.gov.au.2016). The school fees of the Alan children, paid by ABC Pty. Ltd, are also an expense fringe benefit, where the employer is paying the employees private expenses directly on behalf of the employee. Hence, it should be included for fringe benefit taxation purpose (Delany 2012). The mobile phone is provided to Alan for work purpose. From employers end, it should be treated as work related expenses. Hence, the cost of mobile phone should be included for calculating the total amount for GST Inclusive items and later the gross-up amount of the hand set should be excluded from the FBT taxable amount (James et al. 2013). Any expenses, paid for the entertainment of the employees by the employer, are referred as entertainment fringe benefits. It should be noted that the employer can claim for deduction on such expenses under otherwise deductible rule (Rimmer et al. 2014). However, the claim can be made only for the amount, spent for the employees only. Any expenses, spend for the entertainment of the family members or associates of the employees, cannot be included in the entertainment fringe benefits. As the exact per head amount, spent for the entertainment purpose of the employees only, is not possible for ABC Pty. Ltd., the total amount is included in the fringe benefit tax calculation (Jones 2015). It is necessary to compute the total amount of GST inclusive benefits and GST free benefits separately. Then the total values are summarized by multiplying the individual Gross up rates, applicable to the different types of benefits (Ramli et al. 2015). The net taxable value, after deducting the exempted amount from the total gross up value, is then charged with FBT rate, i.e., 49% to calculate the total Fringe Benefit Tax Liability of the employer (Soled and Thomas 2015). On the basis of the assumptions and rules, the fringe benefit tax liability of ABC Pty. Ltd. is calculated in the following table:- In the Books of ABC Ltd. Calculation of Fringe Benefit Tax Liability as on 31.03.2015 GST Inclusive GST Free Particulars Amount Amount $ $ Payment of Phone Bill 2640 Payment of School fees of Employee's Children 20000 Dinner at Restaurant 330 Providing Mobile Phone 2000 Total of GST Inclusive/Free Benefits 4970 20000 A B Gross-up Rate 2.1463 1.9608 C D Gross-up Value 10667.11 39216 E = A x C F=B X D Total Taxable Fringe Benefit 49883.11 G = E + F Less : Exemption for Mobile Phone at gross-up value 4292.60 ($2000 x 2.1463) H Net Taxable Fringe Benefit 45590.51 I = G - H Fringe Benefit Tax Rate 49% J Fringe Benefit Tax Liability 22339.35 K = I x J 2.b:- If ABC Pty. Ltd. includes only 5 employees for dinner and the total cost of dinner remains same, in that case, the per head dinner cost will become higher. It would result in higher FBT liability (Kaplan and Price 2014). The calculations are given below: In the Books of ABC Ltd. Calculation of Alternative Fringe Benefit Tax Liability as on 31.03.2015 GST Inclusive GST Free Particulars Amount Amount $ $ Payment of Phone Bill 2640 Payment of School fees of Employee's Children 20000 Dinner at Restaurant 1320 Providing Mobile Phone 2000 Total of GST Inclusive/Free Benefits 5960 20000 A B Gross-up Rate 2.1463 1.9608 C D Gross-up Value 12791.95 39216 E = A x C F=B X D Total Taxable Fringe Benefit 52007.95 G = E + F Less : Exemption for Mobile Phone at gross-up value 4292.60 ($2000 x 2.1463) H Net Taxable Fringe Benefit 47715.35 I = G - H Fringe Benefit Tax Rate 49% J Alternative Fringe Benefit Tax Liability 23380.52 K = I x J However, if the per head cost of dinner remains same and the total cost of dinner would reduce accordingly, then the total FBT liability will remain unchanged as per the calculations, shown in answer 2.a (Shields and North-Samardzic 2015). 2.c:- The entertainment fringe tax benefit is only applicable for the benefits, provided for the employees. If ABC Pty. Ltd. includes its clients, then also the fringe tax benefit would include only the cost, incurred for employees. The company cannot get any deduction for the entertainment of the clients (Martocchio 2013). References:- Ato.gov.au. (2016).Fringe benefits tax (FBT) | Australian Taxation Office. [online] Available at: https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/ [Accessed 27 May 2016]. Delany, T.P., 2012. Fringe benefits tax James, S., Wallschutzky, I. and Alley, C., 2013. The Henry Report and the taxation of work related expenses: Principles versus practice Jones, S., 2015. 'Cost-to-company'explained: tax planning.Tax Breaks Newsletter, (349), pp.6-7 Kaplan, R.L. and Price, D.J., 2014. Change and Continuity in Fringe Benefit Taxation: Seeking Sense and Sensibility.NYL Sch. L. Rev.,59, p.281 Martocchio, J., 2013.Employee benefits. McGraw-Hill Higher Education Ramli, R., Palil, M.R., Hassan, N.S.A. and Mustapha, A.F., 2015. Compliance costs of goods and services tax (GST) among small and medium enterprises.Jurnal Pengurusan,45, pp.1-15 Rimmer, X., Smith, J. and Wende, S., 2014. The incidence of company tax in Australia Soled, J.A. and Thomas, K.D., 2015. Revisiting the Taxation of Fringe Benefits.Washington Law Review, Forthcoming Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2012.Australian taxation law. CCH Australia www.dlsweb.rmit.edu.au. (2016). www.dlsweb.rmit.edu.au/toolbox/finance/fnbacc02a/preparetax/keyprinciple/ordinaryi.htm. [online] Available at: https://www.dlsweb.rmit.edu.au/toolbox/finance/fnbacc02a/preparetax/keyprinciple/ordinaryi.htm [Accessed 13 Sep. 2016]. www.dlsweb.rmit.edu.au. (2016). www.dlsweb.rmit.edu.au/toolbox/finance/fnbacc02a/preparetax/keyprinciple/statutoryi2.htm. [online] Available at: https://www.dlsweb.rmit.edu.au/toolbox/finance/fnbacc02a/preparetax/keyprinciple/statutoryi2.htm [Accessed 13 Sep. 2016]. Ato.gov.au. (2016). What to include in your assessable income | Australian Taxation Office. [online] Available at: https://www.ato.gov.au/Business/Income-and-deductions-for-business/Working-out-your-assessable-income/What-to-include-in-your-assessable-income/ [Accessed 13 Sep. 2016]. Bender, M., Contacos-Sawyer, J. and Thomas, B., 2013, July. Benefits Strategies for Attracting and Retaining Employees. InCompetition Forum(Vol. 11, No. 2, p. 165). American Society for Competitiveness Shields, J. and North-Samardzic, A., 2015. 10 Employee benefits.Managing Employee Performance Reward: Concepts, Practices, Strategies, p.218 Austlii.edu.au. (2016). INCOME TAX ASSESSMENT ACT 1997 - SECT 6.5Income according to ordinary concepts (ordinary income). [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s6.5.html [Accessed 13 Sep. 2016].

The Beatitudes Essay Example

The Beatitudes Essay The beatitudes, or the commandments of blessedness, given us by the Saviour, do not in anyway annul the commandments of the Law. On the contrary, these commandments complement each other. The Ten Commandments of the Law are restricted to prohibiting those acts which would be sinful. The Beatitudes explain to us how we may attain Christian perfection or grace. The Ten Commandments were given in Old Testament times to restrain wild, primitive people from evil. The Beatitudes are given to Christians to show them what disposition to have in order to draw closer and closer to God, to acquire holiness, and together with that, blessedness, which is the highest degree of happiness. Holiness, arising from proximity to God, is the loftiest blessedness, the greatest happiness that anyone could possibly desire. The Old Testament Law is a strict code of righteousness, but the New Testament Law of Christ is the law of Divine love and grace, the only means by which people are given the strength to live in full observance of the Law of God and to approach perfection. We will write a custom essay sample on The Beatitudes specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Beatitudes specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Beatitudes specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Jesus Christ, calling us to the eternal Kingdom of God, shows us the way to it through fulfillment of His commandments. For their fulfillment He, the King of Heaven and earth, promises eternal blessedness in the future eternal life. Our Saviour teaches: 1. Blessed are the poor in spirit, for theirs is the Kingdom of Heaven. 2. Blessed are they that mourn, for they shall be comforted. 3. Blessed are the meek, for they shall inherit the earth. 4. Blessed are they that do hunger and thirst after righteousness, for they shall be filled. 5. Blessed are the merciful, for they shall obtain mercy. . Blessed are the pure in heart, for they shall see God. 7. Blessed are the peacemakers, for they shall be called the children of God. 8. Blessed are they which are persecuted for righteousness sake, for theirs is the Kingdom of Heaven. 9. Blessed are you when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for My sake. Rejoice, and be exceeding glad; for great is your reward in Heaven. In each of these teachings of the Lord, one should observe the commandments on the one hand and the promises of reward on the other. For the fulfillment of the commandments of the Beatitudes it is necessary to have contact with God through prayer, both internal and external. One must struggle against sinful inclinations through fasting, abstinence, and so on. The First Beatitude Blessed are the poor in spirit, for theirs is the Kingdom of Heaven. Blessed — joyful in the highest degree and pleasing to God; poor in spirit — humble, those who are conscious of their imperfections and unworthiness before God, and never think that they are better or more holy than others. Spiritual lowliness is the conviction that our entire life and all our spiritual and physical blessings, such as life, health, strength, spiritual ability, knowledge, riches, and every good thing of life, all this is the gift of our Creator God. Without help from Heaven, it is impossible to acquire either material well-being or spiritual riches. All this is the gift of God. Spiritual lowliness is called humility. Humility is the foundation of Christian virtue, because it is the opposite of pride, and pride introduced all evil into the world. Due to pride the first among the angels became the Devil; the first people sinned, their descendants quarreled and went to war among themselves from pride. The first sin was pride (Sirach, or Ecclesiasticus 10:15). Without humility it is impossible to return to God. Nor are any of the other Christian virtues possible. Humility permits us to know ourselves, correctly to assess our worth and deficiencies. It acts beneficially in the fulfillment of our obligations to our neighbor, arouses and strengthens in us faith in God, hope and love for Him. It attracts the mercy of God to us and also disposes people well towards us. The Word of God says, A sacrifice unto God is a broken spirit; a heart is broken and humbled God will not despise (Ps. 50:17). Surely he scorneth scorners: but he giveth grace unto the lowly (Prov. 3:34). Learn of me, instructs the Saviour, for I am meek and lowly in heart: and ye shall find rest unto your souls (Matt. 11:29). Physical misery or privation can result in the acquisition of much spiritual humility if this privation or need is accepted with good will, without a murmur. But physical privation does not always result in spiritual humility; it can lead to bitterness. Even the wealthy can be spiritually humble if they understand that visible, material wealth is decadent and transitory, fleeting, and that it is substitute for spiritual riches. They must understand the word of the Lord, For what is a man profited, if he shall gain the whole world, and lose his soul? (Matt. 16:26). But Christian humility must be strictly distinguished from self-seeking self-abasement, such as fawning and flattery, which discredit human dignity. It is necessary strictly to reject so-called noble self-love or defense against affronts to ones honor, which reflect prejudices, pernicious superstitions, which were inherited from Roman paganism hostile to Christianity. The true Christian must decisively renounce these superstitions which resulted in the anti-Christian and shameful custom of the duel and revenge. In reward for meekness of spirit, humility, the Lord Jesus Christ promises the Kingdom of Heaven, a life of eternal blessedness. Participation in the Kingdom of God for the humble begins here and now — by means of faith and hope in God; but the ultimate reward in all of its fullness will be seen in the future life. The Second Beatitude Blessed are they that mourn, for they shall be comforted. The weeping about which the second beatitude speaks is first of all true tribulation of heart, and repentant tears for our sins, weeping over our guilt before the merciful God (for example, the tears of the Apostle Peter after his renunciation). For godly sorrow worketh repentance to salvation not to be repented of, but the sorrow of the world worketh death, said the Apostle Paul (2 Cor. 7:10). Tribulation and tears coming from misfortunes which befall us can be spiritually beneficial. For example, the death of one of our close ones can result in beneficial tears, if the sorrow is permeated by faith and hope, patience and devotion to the will of God. Jesus Christ Himself wept over the death of Lazarus. Even more so can tears and tribulation lead to blessedness when they are shed over the suffering of our unfortunate neighbor, if these sincere tears are ccompanied by Christian deeds of love and mercy. Worldly grief is grief without hope in God. It proceeds not from acknowledgment of ones sins before God, but rather from disappointment in ambition, aspiration to power, desire for gain. Such sadness, characterized by despondency and despair, leads to spiritual death, which can also result in physical death, by suicide or simply weakness due to lack of will to live. An example of such grief is that of Judas Iscariot, the betrayer of Christ the Saviour. As a reward for mourning the Lord promises that they that mourn will be comforted. They will receive forgiveness of sins, and through this, internal peace. The mourners will receive eternal joy, eternal blessedness. The Third Beatitude Blessed are the meek, for they shall inherit the earth. Meekness is peaceful, fully developed Christian love, free from all malice. It is manifested in the spirit of a man who never becomes angry, and never permits himself to grumble against God or people. Meek people do not become irritated and they do not vex or aggravate other people. Christian meekness expresses itself mainly in patient endurance of insults inflicted by others and is the opposite of anger, malice, self-exaltation and vengeance. A meek person always regrets the hardness of heart of the offending party. He desires his correction, prays to God for forgiveness of his deeds, remembering the precept of the Apostle: If it be possible, as much as lieth in you, live peaceably with all men. Dearly beloved, avenge not yourselves, but rather give place unto wrath: for it is written, Vengeance is mine; I will repay, saith the Lord (Romans 12:18-19). The best example of meekness given to us is that of our Lord Jesus praying on the cross for His enemies. He taught us to not take vengeance on our enemies but to do good to them. Take my yoke upon you and learn of me; for I am meek and lowly in heart: and ye shall find rest unto your souls (Matt. 11:29). Meekness tames even the hardest hearts. We can be convinced of this by observing the lives of people, and we find confirmation of it throughout the history of Christian persecutions. A Christian may become angry only with himself, at his own fall into sin, and at the tempter — the Devil. The Lord promises the meek that they will inherit the earth. This promise indicates that meek people in the present life will be preserved on earth by the power of God, in spite of all the intrigues of men and the most cruel persecution. But in the future life, they will be heirs of the heavenly homeland, the new earth (2 Peter 3:13) with its eternal blessings. The Fourth Beatitude Blessed are they that do hunger and thirst after righteousness, for they shall be filled. Those who hunger and thirst for righteousness are those people who deeply acknowledge their sinfulness, their guilt before God, and have a burning desire for righteousness. They try to serve God by a righteous life according to the commandments of Christ, which requires from Christians the most holy righteousness in all their relations with their neighbors. The expression hunger and thirst indicates that our yearning for righteousness must be very strong, as strong as our desire to appease our appetite and thirst. King David beautifully expressed such yearning, As the hart panteth after the fountains of water, so panteth my soul after thee, O God. My soul thirsted for God, the mighty the living (Ps. 41:1-2). God promised that those who hunger and thirst for righteousness will be filled. By this is meant spiritual satisfaction, comprised of internal spiritual peace, a calm conscience, justification, and forgiveness. Such satisfaction in the present, earthly life occurs only in part. The Lord reveals the mysteries of His kingdom to those who hunger and thirst after righteousness, more than to others. Their hearts in this world are delighted with knowledge revealed in the divine truths of the Gospel, in Orthodox teachings. Full satiety, full satisfaction of the holy yearnings of the human soul, and from this highest joy and blessedness, will be granted them in the future, blessed life with God. As the psalmist King David says, I shall be filled when Thy glory is made manifest to me (Ps. 16:16). The Fifth Beatitude Blessed are the merciful, for they shall obtain mercy The merciful are those who have compassion for others, who with all their hearts pity those who have fallen into misfortune or unhappiness, and who try to help them with good works. Works of mercy are both physical and spiritual. Bodily works of mercy: Feeding the hungry. Giving drink to the thirsty. Clothing the naked. Visiting those in prison. Visiting the sick and helping them recover or preparing them for a Christian death. Inviting strangers and foreigners and travellers into ones home and giving them rest. Burying the dead. Spiritual works of mercy: By word and example to convert the sinner from the error of his way (James 5:20). Teaching the ignorant truth and goodness. Dispensing good and timely advice to neighbors who are in distress or danger. Comforting the grieving. Refraining from returning evil for evil. Forgiving offenses with all ones heart. Praying to God for everyone. To the merciful, God promises in return that they will receive mercy. In the future judgment of Christ they will be shown the special mercy for the righteous. They will be delivered from eternal punishment for their sins to the degree to which they showed mercy to others on earth (See Matt: 25:31-46). The Sixth Beatitude Blessed are the pure in heart, for they shall see God. The pure in heart are those people who not only do not sin openly, but do not conceal unclean thoughts, desires and feelings in their hearts. The hearts of such people are free from attachment and infatuation with physical, earthly things. In general they are free from passions caused by self-centeredness, egotism and pride. People with pure hearts unceasingly think about God. In order to acquire a pure heart, it is necessary to observe the fasts proclaimed by the Church, and to guard oneself against gluttony, drunkenness, depraved spectacles and amusements, improper teachings and indecent books. Purity of heart is far superior to simple sincerity. Sincerity requires only that a person be candid and single hearted in relation to his neighbor. But purity of heart requires complete suppression of depraved thoughts and constant remembrance of God and His holy commandments. To the pure in heart God promises that they will see God. Here on earth they will see Him through Grace, mysteriously, with the spiritual eyes of their hearts. They can see God in His revelations, images and likenesses. In the future, eternal life, they will see God as He is (1 John 3:2). Furthermore, since contemplation of God is a source of the highest blessing, the promise to see God is a promise of the highest degree of blessedness. The Seventh Beatitude Blessed are the peacemakers, for they shall be called the children of God. Peacemakers are people living with everyone in peace and harmony and fostering peace among people. When other people are at enmity among themselves they try to reconcile them, or at least pray to God for their reconciliation. Peacemakers remember the words of the Saviour, Peace I leave with you, My peace I give unto you (John 14:27). If it be possible, as much as lieth in you, live peaceably with all men, said the Apostle Paul (Romans 12:18). To the peacemakers the Lord promises that they will be called sons of God. They will be the closest to God, heirs of God, joint-heirs with Christ. The peacemakers by their spiritual feat resemble the Only-begotten Son of God, Jesus Christ, Who came to earth to reconcile sinful people with Divine judgment and to establish peace among people in place of the animosity reigning among them. Therefore to the peacemakers is promised the epithet, sons of God, and inexpressible blessedness. The Eighth Beatitude Blessed are they which are persecuted for righteousness sake, for theirs is the Kingdom of Heaven. For righteousness sake, is meant to live righteously according to the commandments of God, and resolutely fulfilling Christian obligations. Persecuted — for their righteous and pious life, they suffer oppression, persecution, privation and adversity at the hands of the unrighteous enemies of truth and goodness, but nothing can cause them to waver from the truth. Persecution is inevitable for Christians living according to the Gospel’s righteousness, because evil people detest righteousness, as truth exposes their evil deeds, and always persecute people who stand for the truth. The Only-begotten Son of God, Jesus Christ, was Himself crucified by haters of Gods truth. For all His followers He predicted: If they have persecuted Me, they will also persecute you (John 15:20). All that will live godly in Christ Jesus shall suffer persecution, says the Apostle Paul (2 Tim. 3:12). In order to endure persecution patiently for righteousness sake, a person must have love for the truth, be steadfast and firm in virtuous living, have courage and patience, and faith and hope in the help and protection of God. To those persecuted for righteousness sake, for their struggles in confessing the truth, the Lord promises the Kingdom of Heaven, spiritual triumph, joy and blessedness in the heavenly dwellings of the future eternal life (see Luke 22:28-30). The Ninth Beatitude Blessed are ye when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake. Rejoice, and be exceeding glad, for great is your reward in Heaven. In the last, the ninth commandment, our Lord Jesus Christ calls especially blessed those who for the sake of Christ and for the true Orthodox faith in Him, patiently bear disgrace, persecution, malice, defamation, mockery, privation and even death. Such a spiritual feat is known as martyrdom. There is no higher spiritual feat than martyrdom. The courage of Christian martyrs must be distinguished from fanaticism, which is irrational zeal not according to reason. Christian martyrs must also be distinguished from the lack of feeling brought on by despair or pretended indifference, with which some criminals because their incorrigible hardness and pride, serve out their sentences and go to execution. Christian courage is based on the highest of Christian virtues, on faith in God, on hope in God, on love for God and neighbor, on complete obedience and unshaken faith in the Lord God. The highest form of martyrdom was suffered by Jesus Christ Himself, and in like manner, the Apostles and an innumerable multitude of Christians, who with joy went to martyrdom for the name of Christ. Wherefore seeing we also are compassed about with so great a cloud of witnesses, let us lay aside every weight and the sin which doth so easily beset us, and let us run with patience the race that is set before us, and looking unto Jesus the Author and Finisher of our faith, Who for the joy that was set before Him endured the cross, despising the shame, and is set down at the right hand of the throne of God. For consider Him that endured such contradiction of sinners against Himself, lest ye be wearied and faint in your minds (Heb. 12:1-3). For the spiritual feat of martyrdom, the Lord promises a reward in Heaven. But here on earth the Lord glorifies many martyrs for their firm confession of faith with incorruptible bodies and miracles. If ye be reproached for the name of Christ, happy are ye; for the spirit of glory and of God resteth upon you: on their part He is evil spoken of, but on your part He is glorified. But let none of you suffer as a murderer, or as a thief, or as an evildoer, or as a busybody in other mens matters. Yet if any man suffer as a Christian, let him not be ashamed; but let him glorify God on this behalf (1 Pet. 4:14-16). Numberless Christians martyrs rejoiced during unspeakable torture, accounts of which are preserved in factual accounts of lives of the Saints. Note: In Roman courts, special scribes were obligated to write protocols (official records) of judicial procedures and legal decisions. Such protocols of interrogations, made in Roman courts during the legal process of Christian martyrs, after the period of persecutions were carefully preserved by the Church. The protocols came to be trustworthy accounts of the feats of martyrdom of the Christians. Discussion on the Meaning of Evil The concept of evil in the world imposes a grave burden of doubt in the hearts of many faithful people. It seems inconceivable that God would permit evil. In fact, God in His Omnipotence could easily eliminate evil. How could a merciful God allow the evil deed of a single offender to doom thousands, sometimes millions, or even half of humanity to poverty, grief or disaster? What then is the meaning of evil? With God nothing is without reason. In order to answer this question, it is necessary to recall what evil is. By the term evil we do not mean suffering, need and deprivation, but sin and moral guilt. God does not desire evil. Almighty God cannot approve of evil. More than that, God forbids evil. God punishes evil. Evil or sin is in contradiction to the will of God. Sin began, as we know, when the highest angel, created by God, insolently rejected obedience to the blessed will of God and became the Devil. Evil is caused by the Devil. He inspires or influences the occurrence of sin in man. It is not the body which is the source of sin, as many believe. The body becomes an instrument of sin or of good not of itself but through the will of a person. True faith in Christ elucidates the following two causes of sin in the world: The first cause lies in the free will of man. Our free will is the mark of our likeness to God. This gift of God elevates mankind to the highest of all earthly creatures. By freely choosing good and rejecting evil man exalts God, glorifies Him and perfects himself. In the book of the Wisdom of Sirach (Ecclesiasticus 15:14), it says, He (God) in the beginning made man and left him in the hand of his own free will. By this God gives to people of good will the possibility to attain Heaven, and to people of evil will, the other world. However it happens, the result is only by means of a persons free will. Saint Cyril of Jerusalem says, If nature were fused together and it were not possible to do good by free will, then for whom would God prepare the inexplicable crown? Sheep are gentle, but they will never be crowned for their gentleness, because their gentleness comes not from their own free will but from their very nature. Saint Basil the Great says, Why is not sinlessness incorporated our nature, so that it would be impossible to sin, even if we wanted? You do not recognize good and faithful servants when you keep them restricted, but only when you see that they voluntarily fulfill their responsibilities before you. Virtue comes on the condition of free will, not necessity; and free will depends on the condition that we be free. Therefore, whoever reproaches the Creator for not creating us sinless prefers the irrational, immovable nature, not having any yearnings, nature gifted with judgment and independence. In other words, he prefers robots to intelligent creatures. Thus, the internal cause for the origin of evil, or sin, consists of the will of man. The second basis for the existence of evil consists in the fact that directs evil to good. But God does not tolerate evil for the sake of good. For God, it is not necessary to pay such a high price. God does not wish for evil under any circumstances. Bu t when evil penetrated into the world through the fault of sinful people, then God, in plan for the world, compelled even evil to serve good. For example, the sons of Jacob sold his brother Joseph into slavery. They committed an evil deed, but God turned the evil into good. Joseph rose in Egypt and acquired the capacity to save from starvation the family from which the Messiah would come. When Joseph saw his brothers several years later, he said to them, You intended evil against me, but God turned it into good! In the days of the Apostles, the Jews persecuted Christians in Palestine. The Christians had to flee from Judea, the land sanctified by the life and blood of the Saviour. But everywhere they went they sowed the words of the Gospel. The sins of the persecutors were directed into spreading Christianity. The pagan emperors of Rome persecuted the young Christian Church. Tens of thousands of martyrs shed their blood for Christ. The blood of the martyrs became seeds for millions of new Christians. The fury of the persecutors, their sins of hatred and murder were directed by God in this instance into the building up of the Church. They thought and accomplished evil. God turned all of their deeds to the good. The history of mankind, right up to the events of our day, testifies to the truth of these words. The greatest downfall of man concurred with the greatest religious triumph, the turning of men to God. We need only have patience and wait, one day is with the Lord as a thousand years, and a thousand years as one day (2 Peter 3:8) But this intertwining of evil into the plan for the management of the world did not appear to be some sort of belated addition for the correction of creation. The intertwining of evil was provided for in the act of the eternal will of God, in which was determined the creation of the world. For God is the eternal today! His foresight extends to eternity. It functions always and without interruption. (Extracted from a brochure by L. Lusin, Who is Right? with additions. )

European Debt Crisis Essay Example

European Debt Crisis Essay Example European Debt Crisis Essay European Debt Crisis Essay Roger Williams University [emailprotected] Honors Theses RWU Theses 5-11-2011 The Financial Crisis and the European Network Georges G. Gautherin Roger Williams University, [emailprotected] rwu. edu This Thesis is brought to you for free and open access by the RWU Theses at [emailprotected] It has been accepted for inclusion in Honors Theses by an authorized administrator of [emailprotected] For more information, please contact [emailprotected] edu. Recommended Citation Gautherin, Georges G. , The Financial Crisis and the European Network (2011). Honors Theses. Paper 3. http://docs. rwu. edu/honors_theses/3 The Financial Crisis and the European Network Georges G. Gautherin II Bachelor of Arts International Relations Feinstein College of Arts and Sciences Roger Williams University May 2011 2 Table of Contents Abstract . 4 Lit Review . 5 Introduction Network 5 Economic Interdependence 8 Financial Crisis of 2007-2011 . 12 Analysis 3 The Unifying Factor 13 Greece 14 Ireland 19 Portugal . 2 Spain . 24 The United Kingdom . 26 France . 29 Germany 0 Implications for the Future .. 32 .. 35 3 Abstract The financial crisis between the years of 2007 and 2011 affected states everywhere both internally and in their interactions with one another. This essay seeks to focus upon European states and how they were able to recover from the financial crisis and how networking between and among the states evolved as a result of the economic crisis. The analysis for this essay will utilize a range of research materials to establish valid definitions for networking and economic interdependence in order to allow for a sound analysis of the networking between states during the 2007-2011 financial crisis. Due to the recent time period of the topic this essay will draw from both contemporary and older sources, including news articles, to aid in the analysis of the economic networks involving European states. 4 Lit Review Introduction It is the goal of this paper to understand the effects of the financial crisis within Europe, and what the future implications are for the nodes in the European network through economic interdependence. Through the use of key concepts established in the literature review, this paper will cultivate definitions which will form the basis for the argument that the nodes of the European network, for which the European Union serves as the center, are economically interconnected. Should the nodes prove to be economically interconnected, the financial crisis will be the point upon which their interconnectedness is tested, culminating in a strengthening of the economic ties between the nodes or a weakening, or disintegration, of economic interconnectedness between the nodes of the European network. Network The financial crisis of 2007-20110 is an event that has affected every state in the international system. Having spread throughout the world it is important to understand the ways in which states and transnational actors are connected and how this interdependence affects each member of the network. The concept of a network is one that has been around for some time- as actors have been interacting with one another. It is the foundation for all other theoretical concepts in international and transnational relations and as a result it is one that has attracted a large amount of research and analysis. In their article Network Analysis for International Relations the authors, Emilie M. Hafner-Burton, Miles Kahler, and Alexander H. Montgomery, put forth a 5 starting definition of network which they utilize for their writing: they claim networks are â€Å"a mode of organization which facilitates collective ction and cooperation, exercises influence, or serves as a means of international governance† (Hafner-Burton, Kahler, Montgomery 560). Furthermore, networks utilize nodes, which can be â€Å"individuals or actors, such as organizations and states† (562) and it is these nodes that will allow this paper to recognize those involved within the network. They bring forth a c oncrete definition of their own design of networks being â€Å"any set or sets of ties between any set or sets of nodes† (Hafner-Burton, Kahler, Montgomery 562). The second definition brought forth by Hafner-Burton, Kahler, and Montgomery’s article is one that is both simple to understand and very accurate in its description. Combining their second definition with their explanation of nodes the reader is presented with a definition claiming that networks can include any number of state or non-state actors involving themselves through ties of any kind or number, including but not limited to political, economic, environmental or human rights ties. Whereas Hafner-Burton, Kahler, and Montgomery present networks in a basic sense, describing them as including any number of actors, Thomas Risse, in his work Transnational Actors and World Politics, gives his own, more specifically defined, version of network which he defines as â€Å"forms of organization characterized by voluntary, reciprocal, and horizontal patterns† (255). From this we can come to an understanding of how a network is maintained; that it is not always characterized by voluntary patterns. It is possible for a state to be forced, against its will, to partake in a network or actions with a network as a result of military, political or economic actions by an aggressor state. The network may also extend beyond reciprocal 6 patterns between actors. There are situations where one actor may act in a manner that affects its allies directly and other states, with whom it has no direct ties, indirectly. In other words, the actions of state A influence the actions of state B which affect, in turn, the situation in state C. Thus state C is affected by state A even though the two states are not formally involved in an alliance or other specific international network. Closely resembling the definition set forth by Hafner-Burton, Kahler, and Montgomery is Keohane and Nye’s description of networks, in regards to transnational relations, is the â€Å"contacts, coalitions, and interactions across state boundaries that are not controlled by the central foreign policy organs of governments† (Nye and Keohane 331). Furthermore they note that entities that arrive on the international scale that are non-states can become actors, implying that states as well can be actors; as a fact both state and non-state actors can engage in these networked interactions, according to Nye and Keohane (330). The use of Hafner-Burton, Kahler, and Montgomery’s article will allow this paper to build the foundation for its analysis of the economic interdependence of the European state and non-state actors in responding to the financial crisis of 2007-2011, with its simple yet broadlyencompassing definition. The definition provided by Thomas Risse, while useful in its own right, does not entirely fit with the direction this paper seeks to take and is therefore discarded in favor of the definition provided by Keohane and Nye. Their definition is quite useful in that it suggests that actors participate in relations across state boundaries which should be made clear due to the fact that non-state actors could do business solely within the state, fulfilling the requirement of a tie 7 between two actors yet for the purpose of this paper a network focusing upon the international system is far more beneficial than one working only within one state. The concept of ‘networks,’ as utilized by this paper, is one that combines elements from Keohane and Nye and from the article by Hafner-Burton, Kahler, and Montgomery; allowing this paper to define networks as â€Å"any set or sets of ties between any set or sets of nodes† (Hafner- Burton, Kahler, Montgomery 562), with nodes being states and/or non-state actors as described in their article, â€Å"interacting across state boundaries† (Nye and Keohane 330). With this definition of networks the paper can move forth and continue building its foundation. Economic Interdependence Whereas the concept of networks set forth above can be used in any instance in which there are interactions across state boundaries by various nodes this paper seeks to discover the effects of the financial crisis upon the economic interdependence between and among the nodes of the European network, how they were able to rise out of the recession and what the future may hold for the nodes’ economic interdependence. Therefore this paper must now address the effects of economic interdependence on the European network. For the literature researched economic interdependence has varying degrees of importance. In the case of Keohane and Nye, they define interdependence as simply â€Å"mutual dependence, referring to situations characterized by reciprocal effects among countries or among actors in different countries† (Keohane and Nye 8). It can be implied from this that a definition of economic interdependence involves mutual dependence economically meaning the exchange of currency, trade, supplies, and even workers between states and non-state actors. Keohane and 8 Nye though tend to focus upon economic interdependence as of secondary importance to political interdependence. Keohane and Nye utilize economic interdependence in Power and Interdependence to aid in the explanation of international regime change which occurs as governments â€Å"permit economic interdependence to grow† as a result of domestic pressure for â€Å"greater economic welfare† (Keohane and Nye 40). This regime change is therefore used to describe the after-effects of political interdependence and interaction as political and military actions are taken in vies for power post-war periods see a dramatic growth in state economies and international economic interdependence (Keohane and Nye 35-36). Whereas Keohane and Nye focused upon the political interdependence with economic interdependence a result of power and political plays by actors in a network, Zeev Maoz wrote on economic interdependence’s importance on peace between actors in a network. Maoz (274) states that the effect of economic interdependence on peace extends from the state to the system. States are reluctant to initiate conflict against enemies with whom they do not have direct trade ties because the uncertainty and instability associated with conflict may cause heir trading partner to look for other markets, thus adding to the direct cost of conflict. † As the states within a network become more interconnected, they are unable to commence conflict with states they do not have ties with due to the possibility of losing trade they currently have thereby increasing their vulnerability and putting them in a worse position then they were in previously. Utilizing his gathered data Maoz is able to discuss his analysis on the international community between 1870 and 2000 concerning dyadic networks-two nodes interacting with one another-and systemic networks-networks involving three or more nodes; the results of his analysis indicate that economic interdependence in both forms of network tended to â€Å"consistently reduce the 9 frequency†¦and probability of conflict† (277). In a prior chapter Maoz even mentions that the Great Depression had as one of its principal causes a â€Å"growing level of economic interdependence† (1). This statement greatly aids the paper in that it seeks to understand the future implications of economic interdependence on the European network as a result of the financial crisis of 2007-2011, which shows a great similarity in its breadth to the Great Depression and is viewed as one of the worst financial disasters since that event(Reuters). This will aid the paper due to the fact that the Great Depression is felt by many to have been a major contributing cause to World War II; an important fact to bear in mind as we look to the future following the current financial crisis. Maoz’s book, along with the data presented within, will go a long way to help this paper in its analysis of the effects of economic interdependence on the European network. The article Information and Economic Interdependence, by William Reed, greatly assists the analytical development of this paper; he asserts that â€Å"trade may enhance the probability that states settle their disagreement short of military conflict† which produces often undesired costs on both actors, and which may be too much for a potential aggressor to bear (55-57). Furthermore, he argues, it is through â€Å"information,† the distribution of knowledge of the costs of conflict and other crucial parameters in the actor’s value function, which states are able to assess the hazards of conflict with other actors connected to their node both directly or indirectly (Reed, 54-55). Where the literature from Keohane and Nye benefits this paper is in its description of the effects of economic interdependence granting the reader the knowledge that should a state feel vulnerable economically it may attempt military actions in order to rectify the situation. This was true of Japan’s actions in 1941 against the United States in an attempt to gain a resumption 10 in oil trade (Keohane and Nye 18). Furthermore, they note that should war threaten â€Å"international institutions will have a minor role† because states will feel an urent need to act out of self-interest (Keohane and Nye 35). Therefore should the economic interdependence of actors lead to conflict, non-state actors would lose power and influence in situations due to a lack of military power. Power and Interdependence will be useful in aiding this paper in arguing the effects of economic interdependence upon the European network and its nodes, yet this paper focuses upon economic interdependence which is not the principal concern of Keohane and Nye in the Power and Interdependence. This paper will seek to draw from Reed’s argument that trade between states may prevent disagreements from settle with military conflict, furthering the definitions presented from Keohane and Nye’s book, Power and Interdependence, and Maoz’s book. While both reed and Maoz present sound arguments and theoretical analyses of economic interdependence, the concept of economic interdependence utilize Keohane and Nye as its base in order to determine what the effects of the financial crisis of 2007-2011 will have upon the current European network, through the concept of economic interdependence. This paper seeks to understand what effects economic interdependence will have upon the European network after the financial crisis of 2007-2011 and, with the support of these pieces of literature, to discover whether the economic interconnectedness of the European network will be strengthened as a result of the financial crisis, or whether it will be weakened or destroyed as a result of the failure of the interconnectedness between the nodes. 11 Financial Crisis of 2007-2011 The financial crisis of 2007-2011 has been, as mentioned earlier in this paper, compared to the Great Depression as one of the worst financial crises in modern history. Yet some actors seem able to emerge from this crisis with renewed strength and vigor while others are being left behind, crying out for help. It is the goal of this paper to understand how these effects occurred and what the future implications are for those actors in the network through economic interdependence. With the plentiful information and data available due to the recent topic of this paper a firm answer can be very potentially be found. 2 Analysis The Unifying Factor The European Union, referenced throughout this paper as the European network, has been in existence for nearly two decades and is composed of twenty-seven member states, or nodes. These nodes are interconnected through a common European identity, yet a majority of these nodes are interconnected through a factor greater than simply being on the s ame continent; this factor connects their economies that provides a common identity, a feeling of unity, a level of security and stability and support between the nodes of the network; the euro (The Maastricht Treaty). As defined by Keohane and Nye in the literature review section, economic interdependence is the mutual dependence of nodes within a network, economically, in which there is an exchange of currency, trade, supplies, and even workers. The euro is a currency used by seventeen nodes in the European network and fits Keohane and Nye’s definition of being a currency that is shared by nodes. The adoption of the euro, though bringing with it benefits of support, stability, and interconnectedness, has some major disadvantages. One of these disadvantages is the forfeit of the right of an individual node to set its own interest rate. States with their own currencies can set interest rates in accordance with their specific needs, meaning that if their credit seemed â€Å"too loose, they could raise interest rates,† making credit easier to regulate and their economies potentially easier to stabilize(Samuelson). While such a right is convenient, the benefits granted under the adoption of the euro, namely the support and backing of the currency as well as an identity within a unified Europe, is viewed by many as a more important asset. 3 While the nodes have benefitted individually by using the euro, the financial crisis of 2007-2011 shows the extent to which the nodes as a whole are economically interconnected. The drastic increase in debt among the numerous nodes within the network, specifically Greece, Ireland, Portugal, and Spain (which are the deficit nodes upon which this paper focuses), has caused fear, panic, and the realization that the euro, which previously boosted many economies within the network may now cause all who have been bound together to fall. It is feared that the increase in the deficit of one node within the network might cause a general belief that the euro is a weak currency, spreading doubt about its future, and a belief that if one node’s economy is able to fail while being supported by the euro it is entirely possible for the economies of other nodes to fail as well with â€Å"market panics jumping from one weak country to the next† (Steinhauser). The degree to which these nodes are interconnected is found to be evident through the attempted bailout plans made to save the failing deficit nodes and aid them in revitalizing their economies. Greece Among the first to fall into a nearly uncontrollable spiral of debt and deficit was Greece. This was not entirely surprising as Greece was one of the dominant targets of the Marshall Plan in 1947; an attempt to revitalize the economies of numerous European nodes, though the political reasoning behind the Marshall Plan differs vastly from the reasoning behind the bailout plans currently being developed (Kunz 163). The financial aid received more than sixty years ago did nothing to prevent Greece from succumbing to the financial crisis of 2007-2011. Knowing that mostly every node in the world was hit by this crisis it is important in to understand that it is not 14 solely Greece’s fault that it fell into a deficit. However, unlike most other nodes Greece has yet to come out of the recession that has sent her on a downward spiral. Some Greek officials see this point differently; they blame the â€Å"rest of Europe for not helping its crippling financial crisis† the representative of Greece failed to take any responsibility for being incapable of rising out of the financial crisis (â€Å"Greek Deputy PM in roadside over EU†). Many Greek citizens still believe that the German government owes the Greek government reparations for acts taken during World War II including those that led to a famine in Athens, killing approximately 250,000 people, Germany â€Å"stealing its [Greece’s] gold during World War II†¦for Kalavryta, for Distomo and 70 billion euro for the ruins they left† (Itano). Though the financial crisis has caused many in Greece to blame other states for their inability to work through the recession, somesuch as Greek Prime Minister George Papandreouhave cast aside the desire to blame others and have readily sought out solutions to their troubles. In an attempt to stave off growing debt, the Greek government sold â€Å"nearly $7 billion in bonds†¦giving the Greek government much-needed breathing room in its scramble for new loans;† though this action was quite proactive on the part of the Greek government it was not nearly enough (Kulish). A major effect of the financial crisis and the Achilles Heel of the Greek government was its turn towards austerity by promising increases in taxes and reductions in government spending (Jolly, David and Landon, Thomas Jr. ). Though such plans were designed to decrease the deficit by increasing revenues and cutting spending, they will not have that effect if they lead to a reduction in economic activity and growth. . This happened to be the result in Greece, where the Greek government â€Å"narrowly avoided bankruptcy last May [2010]† (AP). With the states of the European network united together through the use of the euro, as 15 previously mentioned, the failure of one state within the network could spell doom for the other states within the network. Greece could not be allowed to fail. In regards to Greece, Chancellor Angela Merkel said, â€Å"Action is needed to help prevent â€Å"a chain reaction that would contaminate the market†Ã¢â‚¬  (Jolly, David and Landon, Thomas Jr. ). In order to prevent Greece’s bankruptcy, discussions ensued for a bailout beginning with 30 billion euros from the E. U. itself and a potential 15 billion euros from the International Monetary Fund (IMF) making the total a loan of 45 billion Euros (Reguly). Quickly enough this plan offered too little to the debt-ridden state of Greece and the loan offer was increased to 110 billion euros â€Å"under an international bailout loan agreement† (AP). Throughout the bailout negotiations, Greece’s actions towards austerity, cutting spending and increasing taxes have put a heavy strain on individual citizens. These acts led to a drastic increase in unemployment throughout the financial crisis, from 7. 9% in 2008 to 10. 2% in 2009 and finally climaxing at 14. 1% by the end of 2010. The following graph shows the rate of unemployment for Greece as well as the other states focused upon in this paper: Germany, France, the United Kingdom, Ireland, Portugal and Spain. 16 0% 6. 25% 12. 50% 18. 75% 25. 00% 2008 2009 2010 2011 Unemployment Percentage Year Germany France United Kingdom Greece Ireland Portugal Spain Figure 1 The unemployment percentage for European countries between the years 2008 and 2011. The dramatic increase in unemployment is one factor showing the continuing decline of the Greek government’s reputation, furthering its inability to save itself or its citizenry as debt mounts. Despite its public commitment to reform, through cutting spending and increased taxation, the Greek government’s budget deficit continued to rise through most of the financial crisis, finally seeing a decrease in 2010. 7 Figure 2 Tracking of Greece’s gross domestic product (GDP) in comparison to their spending- deficit or surplus. (Figures are in million euros). The decrease in the budget deficit in 2010 shows that the bailout has in some small way aided Greece in stabilizing her economy. However, this does not mean that Greece is no longer in danger of bankruptcy, which remains the case throug h 2010 and into 2011 (Inman). Figure 2 notes that in 2007 the Greek government spent 106. 4% of its GDP, in 2008 she spent 109. % of her GDP, spiking in 2009, when Greece nearly declared bankruptcy, to an expenditure of 115. 4% of GDP. This fell in 2010, with the aid of the bailout package, to 110. 5% of GDP. The possibility of Greece defaulting remains, though some experts believe it may be more beneficial to allow a default to occur, enabling the loans to be restructured â€Å"easing the terms of the loans and possibly writing off a portion altogether;† such a proposal would be considered only if the debt was deemed nearly impossible to manage (Chu). While such an action would enable the debt to become more manageable, even to the point that a reduced debt could be paid off, it would have dire consequences for Greece and the other nodes of the European network. Chu quotes Greek Finance Minister George Papaconstantinou saying â€Å"forcing creditors to take â€Å"haircuts,† or losses, would devastate Greek banks, which hold a major share of their 220,000 235,000 250,000 265,000 280,000 2007 2008 2009 2010 Million Euro GDP Deficit/Surplus 18 country’s debt and potentially set off a wider panic. Furthermore, a â€Å"prominent member of the European Central Bank said a Greek debt restructuring would be a disaster for the Eurozone with knock-off effects on banks in France, Britain and Germany that hold Greek debt† (Inman). Greece’s crisis is not one that will be solved overnight, as can be seen by its year long struggle to prevent bankruptcy and default on the loans granted to her by the other nodes within the European network. Greece’s flirtation with bankruptcy and default show the weakness in her government and its inability to stabilize the economy and stimulate growth. Yet the nodes within the network continually bail Greece out of trouble preventing her from falling into bankruptcy or defaulting. The nodes within the network do not want to see Greece default because that would limit investors’ faith in the euro, create a pit in which all excess funds would be drawn in order to save a floundering Greece and the strength of the euro would wane as it was seen to be too weak to keep nodes from falling into bankruptcy. Any action that would represent a failure on the part of the euro is something the European network strives avidly to avoid. Under a worst-case scenario, the failure of one or multiple nodes could mean the failure of the entire euro network. Ireland Despite fervent attempts by the nodes to prevent a contagion effect within the network, Ireland was the next to seek assistance in November 2010, after Greece had sought aid through a bailout from neighbor nodes earlier in the year. After a burst in the housing bubble and poor credit loans to its citizens, Ireland began to suffer the same fate as Greece: a mounting debt and government deficit which put the banks into an unstable state (Steinhauser). Such an effect is described as ironic in that â€Å"until recently, it was admiringly dubbed the Celtic Tiger for emulating Asian countries in attracting foreign investment†¦and achieving rapid export-led 19 growth† (Samuelson). The downfall of this node, despite its small size, indicates that no matter the growth and potential of an economy within the European network, financial crisis and mounting debt can plague any node that is unprepared for such a storm. As can be seen throughout the European network, unemployment rose as the nodes attempted to consolidate funds to stave off deficit and debt. In Ireland, Figure 1, the unemployment rose from 8% in 2008 to 12. 8% in 2009 and reached a level of 14. 5% in 2010, making the unemployment rate in Ireland slightly greater than in Greece. Ireland, in an attempt to put an end to her financial crisis, fell prey to the same trap that ensnared Greece, austerity. As debt and deficit rose Ireland attempted to cut spending and increase taxes. In a manner comparable to Greece, this policy did the opposite of what was intended. Instead of reducing the eficit, it increased it by putting more of the country’s citizenry out of work. Instead of stimulating the economy, it had the effect of â€Å"undermining desperately needed economic growth† (Steinhauser). The result is a node that began the financial crisis with a 128 million euro budget surplus and fell to a 13,196 million euro budget deficit in 2008, a 22,795 million euro deficit in 2009 and a 49,903 million euro deficit in 2010. This translates to spending 107. 3 percent of t he GDP in 2008, 114. 3 percent of the GDP in 2009 and 132. percent of the GDP in 2010, making it the node with the highest GDP budget deficit percentage in the network; such a statistic does not inspire confidence in a node that cannot get its economy under control and stabilized. 20 Figure 3 Tracking of Ireland’s GDP in comparison to their spending- deficit or surplus. (Figures are in million euros). As the crisis steadily worsened, Ireland avidly sought to avoid a bailout. It sought to sort out its problems without the aid of the other nodes in the European network. Against Ireland’s desires, the â€Å"finance ministers of the Eurozone gathered in Brussels†¦determined to push Dublin into accepting help now† (Wearden, Graeme and Julia Kollewe). The actions taken by the finance ministers of the neighboring nodes so quickly after a downturn in Ireland’s situation brings to the forefront the recognition that the financial crisis is not over and is in fact spreading further and faster than previously anticipated. It is evident that the nodes of the European network do not desire the financial crisis to spread. Their goal is to shore up the debt, isolate the problems, and enact resolutions that would cause the economies of the nodes to return to normal and to restore public faith in the euro. The mounting pressure led to a negotiation with Ireland in which she accepted a rescue package of nearly 90 billion euros from the members of the European network in order to â€Å"prop up Ireland’s loss-ridden banks† (Samuelson). With these funds in hand, Ireland must now institute policies that will foster economic growth while limiting the extent of austerity programs until her economy can be stabilized. 0 52,500 105,000 157,500 10,000 2007 2008 2009 2010 Million Euro GDP Deficit/Surplus 21 The crucial factor in the financial crisis occurring in Ireland is the speed with which Ireland was pressured into accepting a bailout package. This is due largely to the fact that, once the situation in Ireland worsened, thoughts immediately turned to Portugal. The Portuguese warned the member node s of the European network that their node â€Å"was at risk of a possible contagion† (Moya). The quickly spreading contagion is forcing the nodes to band together to attack the threat head on in an attempt to halt the problem before it goes any further. While the actions taken to aid Ireland were swift, they were neither a preemptive strike, nor a comprehensive solution to the problem. The danger to the interconnected euro network remains. Portugal In November, as Ireland’s economy faltered and steps by the other nodes within the European network were taken to prevent a contagion effect throughout the network, Portugal highlighted the possibility that it too would need assistance from the members of the European network. Like Ireland, the state’s leaders refused to accept a bailout plan unless all other options were no longer viable. With a cost of borrowing of more than 7%, due to â€Å"the market’s lack of confidence† in Portugal’s economy, according to Moya, and political division preventing â€Å"a new set of austerity measures designed to ease a huge debt burden that is crippling the economy† Portugal continued to falter under an increasing debt and government deficit (Hatton). According to Figure 1 Portugal, just like every other state, saw an increase in unemployment through the course of the financial crisis. However, of the great debtor nodes, Portugal’s’ unemployment rate remained the lowest. It grew only from 7. 9% in 2008, to 10. 2% in 2009, and finally to 11% in 2010 This can be explained by the fact that Portugal had a lower budget deficit than either Ireland or Greece throughout the financial crisis and was the last of the three to 22 ask for assistance; thus, Portugal was able to stave off the worst of the crisis and avoid a bailout longer than the other two. Figure 4 Tracking of Portugal’s GDP in comparison to their spending- deficit or surplus. (Figures are in million euros). The statistics in Figure 4 show that the beginning of the economic crisis had no effect upon the budget deficit, with only a . 4% increase in the budget deficit between 2007 and 2008, yet there was a severe jump in 2009 to a total expenditure of 110. 1% of the GDP which decreased to 109. 1% expenditure of the GDP in 2010, showing that progress had been made to decrease the deficit and spending in relation to the GDP. Despite the mere 1% difference in budget deficit between 2009 and 2010, Portugal was still drowning in debt and in April 2011 requested a bailout by the member nodes of the European network (Seco). The next three weeks resulted in negotiations that have climaxed in an agreement for a 78 billion euro bailout package. Though the precise terms of the package are still under negotiation, the bailout has been heartily welcomed by financial markets which will now allow Lisbon to â€Å"repair its finances without 160,000 167,500 175,000 182,500 190,000 2007 2008 2009 2010 Million Euro GDP Deficit/Surplus 23 defaulting on its debts† (Wearden). The bailout should give Portugal some time to sort out its economy and to pay off debts upon which otherwise it would have defaulted. Similarly to Ireland a few months before, Portugal’s financial downturn was responded to quickly in an attempt to halt the progress of the contagion that had been spreading throughout the European network. Once again, the nodes of the network came together to aid a faltering node and restore faith in the Euro from which they all benefit. Despite the European network’s fervent efforts to prevent any node from defaulting, which have through Portugal been successful, an even greater danger looms on the horizon, Spain. Such a node has the potential to dwarf the first three debtor nodes combined and leave the entire network in disarray. Spain Though originally a creditor, this behemoth node is closely following in the footsteps of the previous three nodes that have all requested bailout packages. Back when Greece was requesting a bailout package, Spain was loaning money, much like the rest of the European network. Because of this, it was affected a bit differently than the previous nodes as it took a hit in the form of a downgraded credit rating, which â€Å"unsettled investors again† (Baetz, Juergen and Pan Pylas). An event such as a downgraded credit score is alarming in that it causes investors to become wary and fearful of investing in a node that is gradually growing weaker and more unstable. As a result it would become difficult for Spain to raise funds as easily as it had prior to its credit score downgrade. After being seen as in trouble throughout 2010, Spain was grouped together with Portugal in November as a perceived risk of default, causing a scare amongst investors. This led to a 24 dumping of both Spanish and Portuguese bonds near the end of November 2010 (Faiola). Furthermore, this perceived risk â€Å"drove their [Portugal and Spain] borrowing costs to near-record highs† causing a further erosion of confidence in Spain (Faiola). During these troubled times, Spain saw a drastic increase in her unemployment rate (Figure 1) from 14% in 2008, to 19% in 2009 and finally 20. 5% in 2010. These levels exceeded every other node in the European network. In comparison to the other nodes analyzed, the budget deficit of Spain is not nearly as bad, percentage wise, as those nodes that requested bailouts; as shown in Figure 5, she begins with a budget surplus in 2007, leading to spending 104. % of GDP in 2008, spending 111. 1% of GDP in 2009 and spending 109. 2% GDP in 2010. Statistically this may not seem to be problematic but when looking at the GDP which exceeds 1 trillion euros, the budget deficit grows very rapidly, creating a great amount of debt in a short period of time. Figure 5 Tracking of Spain’s GDP in comparison to their spending- deficit or surplus. (Figures are in million Euros). Whereas the preceding three nodes have all skirted with defaulting before receiving bailouts, Spain has no current intention of receiving funds from the member nodes of the 1,000,000 ,050,000 1,100,000 1,150,000 1,200,000 2007 2008 2009 2010 Million Euro GDP Deficit/Surplus 25 European network. Though a fund has been established in which approximately 750 billion euros are available to any node utilizing the euro which may be in need of a bailout, Spain has not taken a step towards this fund (Hooi). Despite this, the fear remains that, with Spain’s economy â€Å"more than twice the size of the Greek, Irish and Portuguese economies combined†¦a Spanish rescue could severely deplete the $1 trillion [750 billion euro] stability fund set up by the E. U. and IMF this year to contain the crisis† (Faiola). Should Spain utilize the security net set down by the European network, it would potentially drain nearly the entire fund, leaving little to no money for any other node that may be in need of assistance. Such an action would leave the creditors who invested in the fund, such as Germany, France, and the United Kingdom, vulnerable to future crises as a sizable portion of their economies would be drained by the behemoth node of Spain. The United Kingdom Though not a node that utilizes the euro, the United Kingdom is still an active member of the European network, and a node that helps support some of the others that have nearly defaulted as a result of the financial crisis. Though now a creditor, in 2008 bank reports claimed that the United Kingdom had â€Å"financial losses of GBP122. 6 billion† (UK Losses hit GBP122bn, says BoE). By 2009 Britain claimed to have been out of the recession yet her methods were not as successful in containing unemployment as those adopted by Germany or France. As noted in Figure 1, during the course of the financial crisis, the United Kingdom saw an increase in the unemployment rate from 6. 3% in 2008 to 7. 7% in 2009 and a tiny increase in 2010 to 7. 8% unemployment. 26 Figure 6 Tracking of the United Kingdom’s GDP in comparison to their spending- deficit or surplus. (Figures are in million great Britain pound- GBP). The statistics in Figure 6 show that like many of the other nodes in the European network the United Kingdom saw an increase in its budget deficit by the end of the financial crisis. Starting in 2007, it spent 102. 7% of its GDP, increased that to 105% in 2008 and 111. 4% in 2009 before seeing a slight decrease in 2010 to 110. 4% of GDP. Though this is comparable to Portugal or even Spain’s percentages, the United Kingdom is strengthened by having a set and strict plan of austerity along with a currency it can regulate by not being a node that utilizes the euro (West). With the ability to continually throw around money as it sees fit, the United Kingdom has remained a creditor in order to assist other nodes in need of assistance and nearing default. The United Kingdom has, as a result of the financial crisis, acted as a major creditor node in the European network, with a GBP100 billion exposure to Greece, Spain and Portugal, with â€Å"GBP25 billion invested in Greece and Portugal and GBP75 billion invested in Spain,† as of 28 April 2010. A default by any of these states would leave the United Kingdom with a major deficit as its loans would not be paid back (Treanor). One year later the United Kingdom has a nearly GBP200 billion exposure to Greece, Ireland and Portugal (The Economist) with roughly 1,300,000 ,400,000 1,500,000 1,600,000 1,700,000 2007 2008 2009 2010 Million GBP GDP Deficit/Surplus 27 GBP140 billion of that exposure to Ireland alone (Winnett, Robert and Bruno Waterfield). The degree to which the United Kingdom is economically interconnected is significant in that a default by any node which has taken loans from the United Kingdom would severely damage the economy of the United Kingdom, yet without these loa ns the nodes would have most likely defaulted. Obvously, both sides need each other, which is the very definition of interdependence. France The financial crisis was in fact a wonderful time for France as it was seen as the prominent power in the European network, with supremacy over all the other nodes. France would often brag that she was â€Å"acting while Germany was thinking† (Power Shift). France sought to develop a â€Å"Europe-wide financial regulator and initiate a joint bailout fund† with Germany (Germany and France have often disagreed on bailout strategy). Despite her efforts, France was not able to match Germany’s growth during this crisis and recession and thus fell behind. However, it should be noted that France still remains one of the most powerful nodes in the European network. The unemployment she suffered shows no great change in numbers, from 8. 2% to 10% to 9. 6% in 2008, 2009, and 2010 respectively (Figure 1). Where France truly fell down was in the level of her deficit spending; in 2007 France spent 102. 7% of her GDP, in 2008 103. 3% but in 2009 she jumped to 107. 5% of her GDP, essentially doubling the debt she normally would have taken in that year, finally seeing a slight decrease in the form of a 107. 0% budget deficit in 2010. 8 Figure 5 Tracking of France’s GDP in comparison to their spending- deficit or surplus. (Figures are in million Euros). In spite of this increase in budget deficit, France remained a strong node in the European network, being a major creditor and savior to many defaulting nodes. As a creditor France worked closely with Germany, often shouldering loans similar to those to which the German node was exposing i tself. The French exposure, coming up short under Britain and Germany, is still a significant figure and risk valued at nearly 150 billion euros. Just like the United Kingdom, France would greatly suffer should a node default, restructure its debt, or take a ‘haircut’ and reduce the overall debt it owes (The Economist). The French aided the other nodes within the network in order to protect the euro, showing that it was strong and backed by strong nodes in order to prevent fears from investors in a weak or unstable euro to gain favor with the defaulting nodes and thus solidify its power within the network. The states that accepted these loans became dependent upon France to prevent them from defaulting or falling into bankruptcy. This in turn forced France to become dependent upon their loan repayments. Though simplistic, the investment France made into the defaulting nodes bound the nodes together tighter than they had been before the financial crisis. 1,800,000 1,875,000 1,950,000 2,025,000 2,100,000 2007 2008 2009 2010 Million Euro GDP Deficit/Surplus 29 Germany Germany’s development into the most economically powerful node in the European network was a slow, steady and careful progression in which hasty action was not taken but decisions thought out and weighed. As previously mentioned, France led an effort at the start of the financial crisis to rally nodes behind her in an attempt to solve the financial problems of all the nodes at once. Germany opposed â€Å"any European plan that would mirror U. S. Treasury Secretary Henry Paulsons proposed $700-billion purchase of banks bad assets. Mr. Steinbruck questioned why German taxpayers should have to pay up to stabilize situations for which other countries are responsible† (Germany, France disagree on bailout strategy). The German idea for solving the financial crisis was to worry about its own people first, then to be concerned about those nodes that were unable to save themselves. Germany’s rise to supremacy by the end of the financial crisis was the result of â€Å"years of wage moderation and labour-market reforms that improved its competitiveness† (Power shift). Furthermore, Germany’s rate of unemployment (Figure 1) shows that it started at 7. 1% in 2008, rose to 7. 4% in 2009 and dropped to 6. % in 2010, almost as low as the United Kingdom’s unemployment rate at the beginning of the financial crisis in 2008. Such careful planning on behalf of the German government not only allowed for an increase in job availability but in keeping the budget deficit extremely low. 30 Figure 5 Tracking of Germany’s GDP in comparison to their spending- deficit or surplus. (Figures are in million Euros). Unlike many other European countries, Germany has kept its budget numbers u nder control. In 2007, the state had a budget surplus of . 3% or 6. 55 billion euros; in 2008, it had a surplus of . % or 2,82 billion euros; in 2009, it ran a deficit by spending 103% of the GDP and 103. 3% of GDP the following year. Overall, Germany was able to keep its economy and spending in reasonable balance. With such a strong economy, Germany naturally became a creditor node helping to finance the safety net set up for any node utilizing the euro that would need financial assistance or a bailout (Hooi). Being the prominent node in the European network Germany naturally shoulders a great deal of the loans requested by other nodes within the network. The degree of exposure that is estimated for Germany is upwards of 230 billion euros (The Economist). As a result should the debtor nodes in fact default, Germany and France would be hit simultaneously though Germany would definitely be suffering under a loss of nearly 250 billion euros. Therefore, it is for the same reasons as mentioned for France that Germany and the defaulting nodes are economically interconnected. The defaulting nodes depend upon Germany for 2,300,000 2,375,000 2,450,000 2,525,000 2,600,000 2007 2008 2009 2010 Million Euro GDP Deficit/Surplus 31 conomic and financial assistance while Germany supports the defaulting nodes in an attempt to boost the strength of the euro as well as investor faith in the euro. Should a node fail under the euro it could spell disaster for other nodes depending upon the euro for support, growth and prosperity. Implications for the Future The bailout of several defaulting nodes by economically stable nodes has shown the dependence of th e defaulting nodes, namely Greece, Ireland, Portugal and potentially Spain, upon the economically stable and growing nodes, the United Kingdom, France and Germany. Conversely, the investments made by the creditor nodes and the possibility of a loss on those investments, makes the creditor nodes dependent upon the economic recovery of the defaulting nodes The fear of a node defaulting under the euro first led the creditor nodes to act. A default while under the euro may lead to a panic and the sale of bonds or stock in the euro. Aloss of faith in the euro would prevent future investments from being made, restricting potential revenue and growth. The failure of one node under the euro could lead to the failure of another node, as was feared in Greece, then Ireland, then Portugal. In order to ensure the survival and continued growth of the euro, those defaulting would have to be saved by the creditor nodes. In this case one side would depend upon the inflow of currency to stave off debt and bankruptcy while the other side depends upon the defaulting nodes to work out their problems and show that the euro is still strong and worth the attention of investors. The implications for the future are very bipolar: either the nodes cooperate, unify, and stabilize the economies of the nodes within the European network which could require continued 32 nvestment but would culminate in strengthened economic ties and/or a strong multi-nodal currency, or the nodes of the networks would find the economic interconnectedness weakening and the ties between the nodes dissolving until the network was far weaker than it had been previously or the network had dissolved completely. If the nodes remained united in their goals to prevent any node from defaulting and keeping the euro as strong as possible the end result would be a European network that had been strengthened through crises and despair. The end of the financial crisis within the European network would mean that the defaulting nodes would have found a way to manage their debt, stabilize their economies, and produce a level of economic growth in order to rebuild. Furthermore it would give a justification for the strength of the euro and its adoption within the nodes of the network. Finally, it would show that the nodes of the European network had strengthened their economic ties to the point that the continued prosperity of the euro would depend upon each node working with the others in order to keep the euro strong. If the nodes were unwilling to continue to finance or bailout the countries in trouble, Greece, Ireland, and Portugal might default leading potentially to a default by Spain which would absorb the majority of the safety net set in place by the European network and the IMF. With all four of these nodes defaulting on loans and draining the European network’s reserve of funds, Germany, France and the United Kingdom would all be hit hard causing recessions and a new wave of financial crises. This would spread throughout the network even more rapidly than the contagion seen in the recent past. With a weakened euro and recession, each node may be forced to focus upon itself, default upon loans, do whatever it can to survive, all at the expense of the network. Such an action could lead to nodes drifting apart as the tie that bound 33 them together and forced them to be economically interdependent came unraveled. This could cause the European network to fall apart. It is clear that the euro is a powerful driving force in the actions of the nodes and one that allows for the nodes to bind closer and become ever more interdependent. Yet the euro has the potential to destroy not merely a single node but the entire network as well under specific circumstances. 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