http://news.yahoo.com/economist-euro-crisis-could-erupt-again-080530769--finance.html
While the United States has been experiencing the worst economic crisis in recent memory, an arguably more serious crisis has been occurring in the European Union. Starting in early 2008, many euro zone countries have been facing major economic setbacks and issues. Four members of the European Union have already required bailouts: Greece, Ireland, Portugal, and Spain. Most of this considerable cost has fallen on Germany, indisputably the strongest economic force in the EU.
Last Friday the European Central Bank expressed it optimism in the rising futures of the the eurozone, but economists are skeptical about the future. They assert that the eurozone could easily plunge right back into the crisis if countries fail to put in place and follow much needed policies. If that doesn't happen, many economists believe that the eurozone, the worlds single largest economy, could collapse.
3 comments:
Every country has differences in there market, some better markets than others, like Germany. If one or more of those countries have economic problems, then it effects the Euro entirely, across the board. If each country is not helping each country's economy, then the Euro could easily fail. Do you think that each country should go back to their own currency so that there is no domino effect, or do you think that the Euro is good for the economy?
I don't necessarily think that the European Union should be disbanded or abandoned, but reform is certainly necessary. I think this recession should be viewed as a wake up call that the union can use to strengthen itself in the future, rather than a deterrent. I also feel like the crisis could have been a whole lot worse if these countries didn't have the central bank to fall back on, though this safeguard might also be to blame for the crisis in the first place.
Richie, I think there is no really "good" solution for everybody involved here, but I think the Euro as is cannot last. The problem is that the lack of federal oversight but the idea of a "union" limits what a country can do to deal with bankruptcy. However, if reforms to the euro were created and adhered to, I really think we could see the euro become a powerhouse in the future. The eurozone as a whole has a lot to offer economically, in terms of skilled labor, technology, and natural resources. If they could cooperate, agree, and act as one they could be a real powerhouse, a sort of collection of "states". Only time will tell.
Galen: I agree with your statement, I was never blaming the central bank for the collapse, though I do think the bailouts have been poor decisions. The overall idea after the bailout of Greece was that they would let the next country fall, but HUGE members of the union Spain and France are playing with the idea and they cannot be allowed to fall, thus are almost assured bailouts.
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