VIETNAM NATIONAL UNIVERSITY, HANOI University of languages and international studies Faculty of post-graduate studies ĐÀO THỊ NGỌC NGUYÊN A corpus-based study on collocations of keywords in English business articles ABOUT THE EUROPEAN DEBT CRISIS (Nghiên cứu tập hợp cụm từ từ khóa báo tiếng Anh kinh tế khủng hoảng nợ châu Âu) M.A COMBINED PROGRAMME THESIS Field: English Linguistics Code: 60 22 15 Hanoi - 2012 iv TABLE OF CONTENT Declaration i Abstract ii Acknowledgement iii List of tables vii List of figures ix CHAPTER I: INTRODUCTION I.1 Statement of the problem and rationale of the study I.2 Aims of the study I.3 Scope of the study I.4 Organization CHAPTER II: LITERATURE REVIEW II.1 Corpus linguistics II.2 Sense and sense relations II.3 Transference of meaning II.3.1 Metaphor v II.3.2 Metonymy II.3.3 Other types of meaning transference II.4 Collocations .10 II.4.1 Definitions of collocations .10 II.4.2 Properties of collocations .12 II.4.2.1 Collocations are arbitrary 13 II.4.2.2 Collocations are language-specific 13 II.4.2.3 Collocations are recurrent in context .14 II.4.3 Classifications of collocations 15 CHAPTER III: RESEARCH METHODOLOGY 17 III.1 Data collection instrument 17 III.1.1 Construction of corpus 17 III.1.1.1 Database 17 III.1.1.2 Extracted business articles 19 III.1.2 Concordance program 20 III.2 Data collection procedures 21 CHAPTER IV: RESULTS AND DISCUSSION 22 IV.1 Quantitative results 23 vi IV.2 Collocation analysis of content keywords 26 IV.2.1 DEBT and CRISIS 26 IV.2.2 ECONOMIC 44 IV.2.3 MARKETS 50 Chapter V: CONCLUSION 57 V.1 Major findings .57 V.2 Pedagogical implications and suggestions 59 V.2.1 Improving collocation competence among language learners 59 V.2.2 Corpus-based activities for learner‘s collocation development in ESP class 62 V.3 Suggestions for further studies 67 REFERENCES 68 APPENDIX vii LIST OF TABLES Table 1: List of the selected articles Table 2: Top 100 high-frequency words from the constructed corpus Table 3: First 25 keywords from the corpus Table 4: CRISIS Concordance (Adjective collocations) Table 5: Adjectives collocating with CRISIS Table 6: DEBT Concordance (Adjective collocations) Table 7: Adjectives collocating with DEBT Table 8: CRISIS Concordance (Noun collocations) Table 9: DEBT Concordance (Noun collocations) Table 10: Nouns collocating with CRISIS Table 11: Nouns collocating with DEBT Table 12: CRISIS Concordance (Verb collocations) Table 13: DEBT Concordance (Verb collocations) Table 14: Verbs collocating with CRISIS Table 15: Verbs collocating with DEBT viii Table 16: Other patterns of CRISIS in the corpus Table 17: Other patterns of DEBT in the corpus Table 18: ECONOMIC Concordance (Noun collocations) Table 19: Nouns collocating with ECONOMIC in the corpus Table 20: Composite nominal containing ECONOMIC (with modification within the head) Table 21: Composite nominal containing ECONOMIC (with coordination in the modifier) Table 22: MARKETS Concordance (markets as ‗the total amount of trade in a particular kind of goods‘) Table 23: MARKETS Concordance (markets as ‗people who buy and sell goods in competition with each other‘) Table 24: MARKETS Concordance (markets as ‗a particular country, area or section of population that might buy goods‘) ix LIST OF FIGURES Figure 1: Concordance Program‘s main screen Figure 2: String matching of CRISIS from the corpus Figure 3: String matching of DEBT from the corpus Figure 4: String matching of ECONOMIC from the corpus Figure 5: String matching of MARKETS from the corpus CHAPTER I INTRODUCTION I.1.Statement of the problem and rationale of the study The importance of vocabulary in language learning has always and long been recognized, although there were times when vocabulary was treated as separated from grammar and skills However, under the light of recent studies, vocabulary has even gained much more attention Essential and crucial as it has become, vocabulary has been highlighted as the basis of language and communication Wilkins, an outstanding British linguist, once stated "without vocabulary nothing can be conveyed" Obviously, a rich knowledge of vocabulary not only makes one's ability of using the language recognized and appreciated but also makes him or her be more successful in communication However, no matter how convinced learners of English in principles of the importance of vocabulary, the vocabulary acquisition actually poses enormous difficulties to them One of the most complicated problems arising when vocabulary is dealt with is how to combine and use words appropriately in accordance with culture or language conventions, which is often referred to as ―collocation competence‖ (Hill,1999) Collocations are usually defined as words that typically occur in association with other words; in reality, they run through the whole of the English language and they are as old as the language itself No piece of natural spoken and written English is totally free of collocations Because of their widespread use, the role that collocations play in the language is absolutely undeniable For learners of English in general, with collocation competence, they should have the ability to combine lexical (and grammatical) chunks in order to produce fluent, accurate, as well as semantically and stylistically appropriate utterances For business English learners in particular, a good knowledge of collocation patterns in English is also of great importance The most important characteristics of the language of business English, as opposed to the language of general English, are a sense of purpose, intercultural dimension and a need for clear, straightforward and concise communication (Ellis & Johnson, 1994) In order to achieve these broad objectives of business English learners, teachers have to find out the best ways to teach business performance skills such as socializing, telephoning, meeting, presentation, and report writing In all these situations, collocation competence is significantly essential With the rise of computing power as well as the acceptance of corpus linguistics since 1990s, collocations have received serious treatment The dramatic rise in processing power of computers now makes it possible to quickly compose lists of frequency for lexical items in a large corpus At the same time, there have been a large number of different software programs installed for keywords and collocations extract from corpus data Such software packages have made easier access to the investigation into typical lexical items and their collocations of any particular text genres With the writer‘s personal interest in collocations as a researcher and observations of students‘ tough experience in dealing with collocations in business discourse as a tutor of business learners, this thesis provides a comprehensive research on collocations of keywords in a variety of business articles written about a currently hot topic for business learners, the European debt crisis The thesis, therefore, is carried out in the hope that it may be of some help to business learners of English as well as those who find themselves interested in English semantics and collocation-related issues I.2 Aims of the study The aim of this research is to conduct a close investigation into collocations of keywords from a corpus of a certain number of business articles written about the European debt crisis To be specific, it identifies words with high frequency of occurrence within the chosen corpus and examines their collocations The research, therefore, is carried out to answer the following research questions:  What are the top high-frequency words in the corpus of written articles about the European debt crisis?  What are significant patterns and features of collocations of such keywords? I.3.Scope of the study This study is about to discuss keywords and their collocations in 15 written articles about the European debt crisis The designed corpus of over 20,000 words is taken from online business articles from websites of high reputation such as The Washington Post, Money CNN, ….Keywords chosen for analysis of significant patterns of collocation within the study are those which can distinguish the business genre of the selected articles I.4 Structure of the thesis The study is organized as follows:  Chapter I-Introduction- is firstly introduced, briefly stating the rationale, aims, scope and organization of the study  Secondly, chapter II-Theoretical Background- deals with the theories setting the background for the study  Thirdly, chapter III- Research Methodology- is a presentation on the methodology of the research, referring to the research design, data collection procedures and data analysis procedures of the study  Next, on chapter IV-Results and Discussion-, a detailed discussion of collocations keywords in the selected corpus is carried out, through which some interesting aspects can be revealed  In chapter V-Conclusion- major findings of the study and pedagogical implications and suggestions are presented 62 July Agreement Falls Behind the Curve The deal reached in late July included $157 billion in new funds for Greece and a modest reduction of its debt burden; private lenders saw their bonds rolled over into longer maturities but also had them guaranteed And the European Financial Stability Facility, the eurozone rescue fund, saw its contingency fund grow to 440 billion euros, or $632 billion, and was given new, amplified powers and the ability to use the money to bail out Portugal and Ireland if necessary The response to the package was not what leaders hoped: investors began driving up interest rates in Italy and Spain, economies too large to be bailed out by the new arrangements At the same time, the fall in confidence threatened to undermine the big banks in those countries, whose large holdings of government bonds began to lose value On Aug 7, 2011, the European Central Bank said it would ―actively implement‖ its bondbuying program to address ―dysfunctional market segments,‖ a statement interpreted as a sign that it will intervene to prevent borrowing costs for Italy and Spain from becoming unsustainable Vowing Closer Paths To address the growing debt crisis, Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France met on Aug 16, 2011 at the Élysée Palace in Paris The leaders promised to take concrete steps toward a closer political and economic union of the 17 countries that use the euro They called for each nation in the euro zone to enshrine a ―golden rule‖ into their national constitutions to work toward balanced budgets and debt reduction, a level of discipline well beyond the current, oft-broken commitment They also pledged to push for a new tax on financial transactions, and for regular summit meetings of the zone‘s members 63 Both leaders ruled out issuing collective bonds, known as eurobonds, to share responsibility for government debt across member states, and they opposed a further increase in a bailout fund that will not be put into place until late September 2011 at the earliest Mrs Merkel said there was ―no magic wand‖ to solve all the problems of the euro, arguing that they must be met over time with improved fiscal discipline, competitiveness and economic growth among weaker states But a growing number of leaders in September began quietly discussing a broader plan for greater fiscal integration — since the alternatives could include the collapse of the euro or increasing conflict over bailouts Officials said a major overhaul of the way Europe conducts fiscal policy was likely to take a long time and require changes in the treaties governing the euro But they pointed to the smaller changes that were already taking place as evidence that euro area financial ministries see that they have little choice but to move together if they want to avoid a catastrophic breakdown Increasing Distress The talks took place against a background of increasing continent-wide distress Official figures released in August 2011 showed that quarterly growth in the euro zone fell to its lowest rate in two years Germany — the Continent‘s powerhouse — slowed almost to a standstill Most of Europe‘s main stock indexes lost ground after the data suggested that the debt and economic problems in countries like Greece and Italy were infecting the rest of the 17-country euro zone Meanwhile, leaders groped for a way to expand the effective firepower of the bailout fund, the European Financial Stability Facility, amid a general agreement that the boost agreed to in July was no longer adequate to calm the market‘s fears about big economies like Spain and Italy One suggestion, pushed by the Obama administration, was to use the facility‘s funds to guarantee loans from the European Central Bank rather than to make loans directly 64 Also in September, Greece pushed through a hugely unpopular property tax increase as part of a new austerity package needed to keep installments of the first bailout package flowing And the eurozone‘s members crept through the process of signing off on the July agreement, with crucial votes in favor coming from Germany and Finland, which had threatened to block it unless it got higher levels of collateral on its contribution Under the fretful gaze of investors, the meandering approval process has revealed ever more fissures, layers of decision making and complexity in Europe that adds up to a worrisome inability to react quickly and decisively to upheaval in fast-moving financial markets Fall of 2011: Fears Grow In the fall of 2011, even as European leaders struggled to come up with a new bailout plan for Greece, much larger fears loomed Interest rates soared for Italy, the continent‘s third largest economy, and rose for France, whose banks hold large amounts of Italian government bonds, and where government finances are strained The continent‘s economy was teetering on the brink of a second recession A growing number of economists called for the European Central Bank to step forward as a lender of last resort, as the Federal Reserve has done, to stop the contagion But the bank, whose mandate is focused solely on preventing inflation, has resisted, saying a political solution is required As the crisis deepened, banks in Europe began to hoard capital, straining the finances of their counterparts and hurting companies across the globe that depend on them for loans In December, leaders of the countries that use the euro agreed to an intergovernmental pact adopting tighter fiscal controls All 17 of the countries that use the euro agreed to join, as did six others But Britain refused, raising questions about its future in which it has become increasingly isolated 65 The agreement, which can be adopted more quickly than a change to the European Union treaty — and without Britain‘s consent — would reassert rules limiting deficits to percent of gross domestic product and total debt to 60 percent Violators would be hit with sanctions unless a majority of other countries agreed After the summit, the familiar pattern of market relief followed by new market worries was repeated But on Dec 21, banks borrowed more than $600 billion from the European Central Bank at the extraordinarily easy terms of percent interest for a three-year loan Analysts suggested that the Bank had hit upon an indirect method of stopping the market spiral threatening Italy, Spain and other governments, by flooding banks with money they could use to lock in guaranteed profits by buying sovereign debt Greece Dodges Default With a Second Bailout By early 2012, the sense of crisis had returned, as the leaders of France and Germany threatened to withhold the second aid package without further cuts and promises of structural economic changes At the same time, Greece plunged into meetings with banks and hedge funds about deeper writedowns on its debt — up to as much as 70 percent The proposed austerity package included 20-percent cuts to base pay for workers in private companies and a loosening of public sector job protections With elections looming as soon as April, the three parties that make up Mr Papademos‘s coalition feared that they were essentially being told to commit political suicide to save the country The European Union‘s plan of tax increases, spending cuts and now wage cuts has pushed the country into a deep recession; the economy shrunk by almost 12 percent between 2009 and 2011 and is expected to shrink by up to percent in 2012 The crisis also stripped Greece‘s political center, weak to begin with, of its last shreds of political legitimacy With unemployment at 21 percent, businesses closing, credit scarce and the proposed new wage cuts expected to further decimate the shrinking middle class, the hard left and extreme right are rising 66 In early February, Mr Papademos reached a deal to support the new austerity measures with two of his coalition members, the Socialists and New Democracy, a center right party The right-wing party, Popular Orthodox Rally, balked, but is too small to block the deal, which includes a 22 percent cut in the benchmark minimum wage and cuts of 150,000 public sector layoffs Greek workers responded by walking off the job for the second general strike in a week Street demonstrations in Athens turned violent, and 80,000 people marched in protest the day before Parliament approved the package on Feb 13 Once the deal was finalized and the measures approved by the Greek Parliament, lenders were expected to begin releasing to Greece the aid it needs to prevent a default when its next debt payment comes due on March 20, 2012 On Feb 21, after more than 13 hours of talks in Brussels, European finance ministers approved a new bailout of 130 billion euros, or $172 billion, subject to Greece taking immediate steps to put the deep structural changes that they agreed to into effect Greece must persuade, if not actually force, its private sector bond holders to accept a higher than expected loss of more than 70 percent on their holdings to reduce Greece‘s debt stock by the targeted amount of €100 billion The agreement included a reduction in interest rates on loans from Greece‘s first rescue in 2010, and European central banks foregoing profit on their Greek bond holdings, that allowed the deal to satisfy a mandate set by the International Monetary Fund that Greece‘s debt come down to 120.5 percent of gross domestic product by 2020 Though Greece may have dodged a default with its last-minute bailout deal, longer-term doubts over its ability to repay its staggering debts remained, raising questions about whether even more rescue money will eventually be needed 67 It is uncertain if another round of austerity can bring Greece to a point whereby it generates enough revenue to pay off its obligations — even if the private sector debt deal goes through — and return to the market on its own The Debt Deal After months of hardball, high-wire negotiations, Greece announced on March 9, 2012, that it had clinched a landmark debt restructuring deal with its private sector lenders The deal clears the way for the release of bailout funds from Europe and the International Monetary Fund that will save the country from imminent default The Greek finance ministry said that 85.8 percent of private creditors holding 177 billion euros in Greek bonds participated in the bond swap After invoking collective action clauses, provisions that will force the holdouts to accept the offer, the participation rate would rise to 95 percent and meet the target set by Europe and the I.M.F for the release of crucial rescue funds The ministry also said that 69 percent of investors holding a category of Greek bonds issued under laws other than Greek law had agreed to the exchange — or about €20 billion worth This figure was much higher than anticipated because many of these investors were expected to either challenge Greece in court or hold out for better terms For Greece, the better than expected numbers highlights the success of the aggressive legal strategy to force bond holders to take up the exchange even though they would accept a big loss in the process Seen at first as a risky gambit that could end up badly, the take-it-or-leaveit approach — mixed in with tough rhetoric from public officials in Greece and Europe — proved to be highly effective as it forced even the most reluctant investors to tender their bonds The value of Greek 10-year bonds had shortly before hit a record low of 16 cents on the euro 68 Downgrading France’s Credit Rating On Jan 13, 2012, Standard & Poor‘s stripped France of its sterling credit rating, downgrading it one notch from AAA to AA+ The ratings agency also cut Portugal‘s credit to junk status and downgraded Italy‘s debt by two steps in a wide-ranging revision of European countries caught in the euro crisis The actions, which lowered the ratings of nine countries, would be the strongest signal yet that Europe‘s sovereign debt woes were far from over and would pose fresh political challenges for politicians as they try to stabilize the problem on the Continent A downgrade by a single ratings agency like Standard & Poor‘s could have an immediate, though not devastating, impact on the countries‘ ability to borrow money S.& P warned in December 2011 that the agency was reviewing the credit ratings of 15 European Union countries because of the crisis Germany and the Netherlands, which were on the original list, did not receive a downgrade In addition to Italy and Portugal, two nations — Spain and Cyprus — had their ratings cut by two notches Austria, Malta, Slovenia and Slovakia, along with France, were lowered by one grade The ratings of the other countries in the review — Belgium, Estonia, Ireland and Luxembourg — were unchanged The ratings revisions came at the end of a week in which Mr Sarkozy and Prime Minister Mario Monti of Italy warned that the crisis could deepen if steps were not taken to stoke growth Both delivered their messages to Chancellor Angela Merkel in her offices in Berlin, prompting the German leader to admit for the first time that the harsh program of austerity she has been pushing on the euro zone was not a cure-all for the crisis An Escalating Spiral of Debt? 69 As difficult as the last two years have been for Europe, 2012 could be even tougher Each week, countries will need to sell billions of dollars of bonds — a staggering $1 trillion in total — to replace existing debt and cover their current budget deficits At any point, should banks, pensions and other big investors balk, anxiety could course through the markets, making government officials feel like they are stuck in a scary financial remake of ―Groundhog Day.‖ Even if governments attract investors at reasonable interest rates one month, they will have to repeat the process again the next month — and signs of skittish buyers could make each sale harder to manage than the previous one The challenge for Europe is to keep Italy and Spain from ending up like Greece and Portugal, whose borrowing costs rose so high in 2011 that it signaled real likelihood of default, making it impossible for the governments to find buyers for their debt Since then, Greece and Portugal have been reliant on the financial backing of the European Union and the International Monetary Fund The intense focus on the sovereign debt auctions — and their importance to the broader economy — starkly underscores the difference between European and American responses to their crises Since 2008, there has been almost no private sector interest to buy new United States residential mortgage loans, the financial asset at the root of the country‘s crisis To make up for that lack of investor demand, the federal government has bought and guaranteed hundreds of billions of dollars of new mortgages But the crisis response in the United States did not depend solely on government-backed entities like the Federal Reserve to buy housing loans Banks and investors also took large losses on existing housing debt While painful, the mortgage debt proved less of a drag on the financial system 70 So far, Europe has been averse to taking permanent losses on government bonds Except in the case of Greek debt, European policy makers have shied away from any plan that could mean private holders of government debt get hurt Such haircuts might seem like the recipe for more instability But if Europe struggles to find buyers for its debt, more radical options are likely to be considered Europe‘s debt problem is huge, and the experience in the United States suggests dealing with it may take several, more drastic approaches In February 2012, Eurostat, the union‘s statistical agency, said the debt ratios of the 17 euro zone countries as a whole rose to 87.4 percent of G.D.P from 83.2 percent a year earlier For all of the 27 European Union nations, the debt ratio rose to 82.2 percent from 78.5 percent Those averages remain below the roughly 100 percent for the United States and 200 percent for Japan Among the most indebted euro members, Italy‘s debt ratio rose 0.5 point to 119.6 percent in the third quarter from a year earlier, though it did show progress in shaving 1.6 points from the second quarter of 2011 Portugal‘s debt ratio rose 18.9 points from a year earlier, to 110.1 percent, while Ireland‘s rose more than 16 points, to 104.9 percent Backlash Against Austerity In April 2012 there was a growing sense of resistance to the German prescription of budget cuts as the prescription for all From trading floors to polling stations to the streets of cities across Europe, the message appeared increasingly to be that countries cannot cut their way to fiscal health, but need growth, too In May, voters in France and Greece punished politicians associated with austerity; France ousted conservative President Nicolas Sarkozy in favor of Francois Hollande, a socialist and 71 Greek voters cut the share of votes for its two traditionally dominant parties in half, while far right and far left parties gained Despite the rising criticism, Berlin did not seem ready to concede defeat Chancellor Angela Merkel reacted to the election results by insisting that the tough fiscal pact agreed to in late 2011 was not negotiable, although she said she was willing to discuss measures to promote growth But while there was a growing consensus on the need for new growth policies, it was far from obvious what those policies should be, particularly for the heavily indebted countries already having trouble selling government debt Spain Accepts Bailout for Ailing Banks In June 2012, responding to increasingly urgent calls from across Europe and the United States, Spain agreed to accept a bailout for its cash-starved banks as European finance ministers offered an aid package of up to $125 billion The decision made Spain the fourth and largest European country to agree to accept emergency assistance as part of the continuing debt crisis The aid offered by countries that use the euro was nearly three times the $46 billion in extra capital the International Monetary Fund said was the minimum that the wobbly Spanish banking sector needed to guard against a deepening of the country‘s economic crisis The announcement of a deal came amid growing fears that instability in Spain could drag down an already sputtering world economy The decision was the culmination of weeks of a contentious back-and-forth between Spain and its would-be creditors in which it was hard to tell how much of Spain‘s resistance to financial help was tactical maneuvering for a better deal and how much a refusal to admit the depth of the banking sector‘s troubles 72 European officials have said they wanted their offer to go well beyond Spain‘s immediate needs to shield the country from any destabilizing effect from the Greek parliamentary elections on June 17 Spanish officials denied that their country was in the same position as Greece, Portugal and Ireland, which have all received bailouts that demanded they slash spending Spain‘s prime minister, Mariano Rajoy, rejected suggestions that Spain had been pushed to request help ahead of new Greek elections that could precipitate Greece‘s withdrawal from European monetary union 73 On October 26th, the members of the Euro Zone agreed to three major structures to reduce credit stress within the union First, there was an agreement to increase the losses to private sector Greek bondholders from 21% to 50% Second, there was an agreement on the need for bank recapitalizations of 108 billion EUR Third, there was agreement to expand the size of the bailout facility to enhance its ability to cover larger nations All are important and all are related Let‘s review the structures to gauge if they will be successful and to gauge what additional measures need to be taken to contain the crisis Greece was the initial infection for the European debt crisis and therefore resolving this country‘s issues were seen as critical for containing the problem Clearly, this was a nation that needed a severe restructuring of not only its fiscal spending, but also its economy With one out of five workers employed by the government, the public-private balance was out of balance and encouraged the electorate to vote for legislation favorable to government spending With the economy contracting 7.4% in 2010 and expected to contract 5.5% in 2011, the country‘s tax receipts continue to shrink and their ability to service their debt has decreased significantly Greece has a debt-to-GDP level of 145% and their tax revenues can support less than a third of that load In July, Euro zone members agreed to a 109 billion EUR loan to Greece as well as a voluntary (to avoid triggering CDS) private sector 21% cut to face value of Greek bonds Clearly, this reduction in debt load was not enough to set Greece on a sustainable fiscal path At that time, the markets were pricing Greek bonds at only a 30-40 of face value and reflected what they believed was sustainable In October, the Euro zone nations acted again to reduce the 21% haircut to 50% for private sector bondholders While this is closer to a level they can support, the problem is that cut is only for the private sector holders and it will only reduce the debt-to-GDP levels to 120% by 2020 Greece needs to have this level reduced to 60% for a true sustainable debt load Therefore in the medium term, the Greek issue will not be resolved by further austerity measures or by a new Greek government It must restructure its debt with losses for all bond holders, both private and public including the ECB 74 With this in mind, the progression of the European debt crisis has been that the contagion moved from the periphery countries into the core countries into banking system It's this third stage of infection that has expanded the crisis into an acute stage which had to be addressed expeditiously Sadly, the debt crisis has been dragging on since November of 2009 and through 13 meetings of European leaders to no resolution This has exacerbated the downward spiral of confidence leading to US money market funds not extending credit to European banks and creating a potential funding crisis It didn't help when the EBA (European Banking Authority) did a stress test recently that gave Dexia a passing grade only to see the bank collapse and have to be broken up The IMF has calculated that European banks need to raise E200 billion to plug a hole in bank balance sheets created by sovereign debt write-downs with other estimates as high as E275 billion Unfortunately, the October Euro zone agreement was underwhelming in that it asked Europe's big banks to find only 108billion EUR infresh capital by June 2012 to strengthen the banking system The EBA ran new stress tests and this higher level of capital would make lenders to reach a 9% threshold for their tier one capital ratios Europe missed their opportunity to shore up their banking system quickly and take a major step towards providing certainty to investors over the entire banking system One of the unintended consequences of simultaneously putting the Greek bond haircuts on the private sector and asking banks to recapitalize is forcing owners of all sovereign European debt to sell With only the private sector bondholders taking the Greek haircut and the haircut not reducing the debt-to-GDP down enough, the perception is that more will be needed and it will fall on the private sector This encourages bondholders to sell now or take more losses Also, this structure may be used on other nations like Ireland, Portugal, Spain or Italy and further encourages selling of those nations‘ debt Finally, banks can raise their tier one capital ratios by either issuing more stock or by reducing the assets on their balance sheets With stock prices already extremely low, issuing stock is not only dilutive, but won‘t raise capital very efficiently and therefore will not likely be done However, banks will be incented to reduce their balance sheets by selling assets like sovereign debt and by reducing their lending 75 Both of these outcomes are negative for European growth (and tax receipts) and for prices of sovereign debt Finally, the expansion of the European Financial Stability Fund or EFSF is seen as critical for dealing with the contagion that has now engulfed Italy The European Financial Stability Fund has been underfunded since its inception due to constraints over the AAA ratings of the bonds it issues to fund itself The original lending facility was under E250 billion, but was just boosted to E440 billion under the July 21st agreement With Italy now sucked into the vortex of the downward debt spiral, this fund needed to be expanded to be able to cope with the size of Italy's debt at around E1.8 trillion As we learned from the 2008 US crisis, there are numerous structures that can be used to expand lending and help foster confidence in the financial system (ex TALF) The October 26th Euro zone agreement focused on two leveraged paths that are intertwined: a special purpose investment vehicle(SPIV) and an insurance model The SPIV would be mandates to invest in sovereign bonds of a country in both the primary and secondary markets The insurance model appears to be able to absorb first proportion of losses incurred by the SPIV up to 20% Both structures were deemed necessary, but both structures could "statistically increase member states' gross debt" and thereby also potentially create conditions for a member country downgrade The goal was to eventually boos the EFSF lending by approximately E1 trillion The concept was to have the EFSF buy the bonds of Italy at auction and thereby significantly reduce Rome‘s borrowing costs To raise capital, the EFSF would issue bonds and have these insured up to 20% of first losses However, the capital markets appetite for these types of bonds has shrunk due to the volatility in the markets This means that the leverage for the EFSF would need to be reduced to increase the insurance component to 30% to incent investors to buy these bonds The new EFSF structure is expected to be in place by the end of November, but remains a question mark until the final structure is presented Given the state of the Greek bailout and the form of the private sector haircuts, the inadequate bank recapitalizations and the still unformed, levered EFSF fund, it should surprise no one that 76 the October relief rally in risk assets has stalled and volatility has remained There are many unanswered questions that need to be resolved and structures that need to be concretely put in place to create the conditions for a stable and sustainable European fiscal environment Going forward, this translates into continued uncertainty for the financial markets However, the fact that Europe has moved this far is a welcome sign and bodes well for containing the debt disease to allow enough time for a cure ... similarities and differences in their behavior Distinctions are made between grammatical collocations and semantic collocations In their opinion, grammatical collocations often contain prepositions,... characteristics above lead to the fact that what is perfectly acceptable collocation in one language may be unacceptable in another Take the case of eat in English and ăn (eat) in Vietnamese as a. .. before the crisis during the crisis in a state of crisis in crisis Table 17: Other patterns of DEBT in the corpus rating of debt billion of debt form of debt amounts of debt purchases of debt write-downs