Banking On Legitimacy : Ecb And The Eurozone Crisis Essay

Addressing some issues, the European Union decided to issue 750 million Euros in order to start the process of financial stability for the whole union (Mckee 524). Over time, the union learned that that the amount of money was not enough in order to help each countries’ individual financial crisis. As of now, the union has to increase the amount of money they are feeding to countries in hopes of fixing the economic issues. The continuing issue with the European Union’s economic plans is finding the money to keep funding countries with low economic growth. Furthermore, the union also has to figure out how to deal with the issues that are outside of the European Union’s borders. In

When the nancial crisis boomed in the United States in 2007, the worldwide contagion was rapid and extensive and between 2008 and 2012 it turned into a global crisis. One of the most interesting facts 7 is that, while the US managed to recover in 2010, with a GDP growth of 2%, the EU is still

European Central Bank (ECB): Sustainable fiscal policies by all the EU members and the punishment for those members that do not comply with the

The weekend of May 5-6 opened a new chapter in the Eurozone debt crisis as voters in France and Greece voiced their disproval over current leadership. With news of France's Sarkozy losing the presidency, and "a dismal election result for Greece's pro-bailout parties" (Reuters.com. May 7, 2012. PP. 1); the future of the Eurozone continues to be shrouded in uncertainty. Debt yields for Greece, Ireland, and Portugal spiked as bond investors ruminated over fiscal and monetary policies. Likewise in Spain, the ten year bond pushed closer to the "psychologically important 6 percent" (Reuters.com. May 7, 2012. PP. 1) threshold. These events highlight the troubling issues of austerity, growth, and debt service which are weighing down the European economy, and as a result imperil the global economic growth story.

The bursting of the United States housing bubble during the period of 2006-2007 had triggered the 2008 financial crisis which also spread to the European Union zone. Many major European banks, many of which had significant holdings in the American market, started to crumble, followed by bailout requests, initiating a subsequent crisis that led to the Eurozone crisis. The combination of government debt crisis, a banking crisis, and further worsen by a growth and competitiveness crisis had thrown what could probably the biggest challenge faced by the enlarged Union at the dawn of the twenty-first century. In light of the crisis, the European Council has initiated three relief institutions: the European Financial Stabilisation Mechanism

From the Financial crisis that struck the United States in 2008, to the world economic crisis and currently the European debt and sovereign crisis, the snowball is growing each day as the whole world's economy is heading towards the rock bottom. This project tackles the issue and the causes of the European debt crisis and its consequences on the euro currency and on the international financial markets. It also focuses on examining the austerity measures and policies taken by European governments to bail their countries out of the turmoil, and finally it tenders solutions that could be undertaken by governments to face or unravel such

The ECB, however, was declared to be highly supranational from the very outset, and its effects on national sovereignty were recognised by the member states in the Treaty of Maastricht. Member states, unlike in the case of the ECJ, were fully aware they would be giving up significant aspects of monetary and fiscal autonomy. However, the ECJ has more flexibility than the ECB to interpret which duties fall within its responsibility. In the case of the ECB, the roles are well defined and it has a very specific institutional mandate, whereas the ECJ’s roles are not well delineated and change over time as the institution transforms. With no limitation or even guidance on the rules of interpretation that should be applied, the ECJ can adopt its own methods for interpreting the Treaty, establishing its difference from national and international legal systems. Thus, the ECJ has increased its authority through its interpretation of the law and rules. Moreover, the ECJ and national courts have continued to exist in parallel and a crucial element of the ECJ’s competency depends on the national courts for implementation. By contrast, the ECB took over all the crucial functions of the national central banks and its institutional structure does not depend on the national central banks to any great extent.

The European Debt Crisis often referred to as the Eurozone Crisis, struck the European Union at the end of 2009.

The Eurozone is facing a serious sovereign debt crisis. Several Eurozone member countries have high, potentially unsustainable levels of public debt. Three—Greece, Ireland, and Portugal—have borrowed money from other European countries and the International Monetary Fund (IMF) in order to avoid default. With the largest public debt and one of the largest budget deficits in the Eurozone, Greece is at the centre of the crisis. The crisis is a continuing interest to Congress due to the strong economic and political ties between the United States and Europe.

In 2008, the world experienced a tremendous financial crisis which is rooted from the U.S housing market. Moreover, it is considered by many economists as one of the worst recessions since the Great Depression in 1930s. After bringing a huge effect on the U.S economy, the financial crisis expanded to Europe and the rest of the world. It ruined economies, crumble financial corporations and impoverished individual lives. For example, the financial crisis has resulted in the collapse of massive financial institutions such as Fannie Mae, Freddie Mac, Lehman Brothers and AIG. These collapses not only influenced own countries but also international scale. Hence, the intervention of governments by changing and expanding the monetary

financial crisis that is still affecting the European continues have destroyed the EU reputation of being a formidable economic block. Over the past seven years, Greek, Portugal, Spain and Ireland have all been on the edge of finical collapse threatening to bring down the economies of Europe.

The European sovereign debt crisis, which made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties (Haidar, Jamal Ibrahim, 2012), had already badly hurt the economies in “PIIGS”, Portugal, Ireland, Italy, Greece and Spain. This financial contagion continues to spread throughout the euro area, and becomes a dangerous threat not only to European economy, but also to global economy.

The global financial crisis which began in 2007-2008 in the USA had a negative effect on the economy of the European Union, mainly in the Euro area. The falling budget revenues during the recession were coupled with an increase in public expenditure resulting from the implementation of anti-crisis programs, which led to an increase in the budget deficit and public debt. Anti-crisis packages have been used to the greatest extent in countries such as United Kingdom, Germany, France, Austria, Denmark, Sweden, Belgium, and also in Spain, while the countries that have proven to be the weakest links in the Euro area, i.e., Greece, Ireland, and Portugal, almost did not use them at all (Owsiak 2011, pp. 71-75, Mering 2011, pp.209-215). As a result, they began seeking higher yields to compensate for the higher risk of default. This led to higher interest rates for troubled governments.

This paper is concerned with the concepts of accountability; representation and control explain the euro debt crisis in detail. The author takes a deeper journey into the meaning of occurs of Euro sovereign debt crisis by use of definition of ARC to in-depth explain this issue. We propose further examination of the ARC relating to the Euro sovereign debt crisis in order to propose a prosperous and harmonious of Euro zone.

What is the European Debt Crisis? The European Debt Crisis is the failure of the Euro, a currency that ties seventeen European countries together. In this paper, I will be describing the cause and effect of the debt crisis along with what would happen if the European Union stayed with the economy they have. Then what I believe is the best solution to fixing the debt crisis.