The Euro crisis, global financial crisis, European Union
The Euro crisis is an economic crisis which not only points to the weaknesses of economic integration, but also points at the consequences of poor economic policies at the state level. The aim of this paper is to synthesize literature on the causes, progression and impacts of the Euro crisis on the European economy. The literature brought out in the paper shows that the Euro crisis is far from over and that the European countries have to rethink about the economic integration strategies that can encourage prudent management of individual economies in the region in order to avoid such shocks.
The Euro crisis was seen not only as a financial problem in European Union countries extending from the global financial crisis, but also as a real test of the essence of economic integration. The European Union has come out as a benchmark of economic integration in the whole world. The rationale behind the terming of the European Union and a global benchmark when it comes to matters of economic cooperation and unity among states in the region is that it is the only economic union that has managed to realize the workability of a common currency. However, as mentioned in the opening sentence, the Euro crisis, whose genesis lies in the debt crises that mounted in a number of countries forming the monetary union, namely: Greece,
Spain, Ireland, and Italy among others resulted in the replication of the problem across the European Union.
[...] Other countries in the Eurozone totalling to sixteen also followed a similar road. However, most of the efforts initiated by players in the Euro crisis are short term, raising questions about the possibility of developing long term economic measures to prevent a debt problem from occurring again in the future. Farrell & Quiggin (2011) see the short term strategies as necessary for limiting expenditure and ensuring that the bond markets across the Eurozone calm down. After laying blame on Greece for the Euro crisis, most of the European countries agree that saving Greece is a key step in easing the economic pressure in the region. [...]
[...] The reason as to why Germany finds itself at the centre of the Euro crisis is that it depends on the Eurozone for approximately half of its net exports. The financial woes in the Eurozone present a new basis on which the issue of regional economic integration should be reassessed. Walker & Galloni (2013) report on the thoughts raised about the benefits and risks associated with leaving and remaining in the European Union for countries that have been severely affected by the Euro crisis. [...]
[...] The problem in the Eurozone lies with the inconsistent and fragmented economic policies and strategies by the countries in the Eurozone. Saving the Euro is the priority of the European Union. Nonetheless, a look at individual countries, especially the economic powerhouses in the European Union like Britain, France and Germany shows that these countries are committed to saving their financial institutions; mainly banks from the risks associated with the Euro crisis (Farrell & Quiggin 2011). Farrell & Quiggin (2011) further note that some countries like Germany have gone as far as developing laws to help induce debt brakes. [...]
[...] The issue of spendthrift governments cannot arise if each of the governments remain committed to the rules and policies, and if other governments in the European Union remain committed to supporting a worthy economic course for all other partners in the European Union. Prudent economic management is a vital element for each country in the European Union. As such, there is a need to look into this attribute. The Euro crisis finds its roots in the attributes of irresponsible fiscal and monetary policies by individual countries. [...]
[...] Given the fact that these countries can hardly abandon the Euro, then, it means that the political rhetoric should be eliminated from the debate and that stakeholders have to devise a system of checks and balances for each country so as to avoid such a crisis in the future. Bibliography Baimbridge, Burkitt, & Whyman, P 2012, 'The Eurozone as a Flawed Currency Area', Political Quarterly pp. 96-107. Brittan, S 2010, 'The euro? will it still be around five years from International Economy, vol no pp, 6-10. [...]
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