In socialist fashion, the euro zone countries have recently agreed to "increase the amount of money available for any future financial bailouts." Looking to stop its own debt crisis, the countries in the euro zone have decided to increase the resources they have no in order to plan for a future crisis. This looks good for collaboration attempts within the euro zone, as some countries will have to be propped up and paid for by other, more prosperous countries.
http://www.businessweek.com/ap/2012-03/D9TQTF2O1.htm
3 comments:
I am kind of worried about this bailout. It will definitely help the economy, but I'm concerned about their potential space for the growth and their ability to re-fill the bailout money.
This gives incentive for the lesser economically prosperous countries to not work as hard to work their way out of debt when they know they have a rather large safety net underneath them.
I agree that the increase of money available for further financial bailouts in the Euro zone will mitigate the current crisis. However, whether it is a policy that will benefit the long term, it will depend on peoples’ thought on it. For some speculators, it will encourage them to make more risky investments that could win them more, whereas won’t hurt them so much as they can always be bailed out. In contrast, for virtuous investors, this is a real chance for them to overcome the crisis.
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