The Fallout from a Potential Eurozone Breakup

The European Union (EU) is a unique economic and political partnership between 28 different countries. It consists of about half a billion citizens, and its combined economy represents about 20 percent of the world’s total economy (Briney, 2015). Today The European Union works as a single market, with free movement of people, goods and services from one country to another. There is a standard system of laws to be followed, and since 1999 many countries share a single currency called the Euro (Europa.eu, 2015). This essay will explore the background history of the European Union and the benefits and drawbacks of the European Union.

What the Euro experience has taught us is that even countries which are not vastly different from each other in terms of economic health, can face a phenomenal crisis within just 10 years of the creation of the single union. How then would you expect a global currency encompassing countries with vastly different structures, in vastly different stages of growth and using vastly different means of managing their economies to be stable?

In Europe, the single currency created additional problems because of overvalued exchange rates, and high bond yields.” (Pettinger, 2013).

Being unaware about issues on the other side of the world made me realize on intriguing economic debt crisis that is going on in countries that seem like they are holding together. Greece and the European was a great issue to discuss and view both sides before since I was unaware that there was a long going crisis going on in this side of the world. Greece can either get a so many bailouts repeatedly or they can fend for themselves to find how the country is able pay back the debt they owed the EU within the past years. In my opinion, I think that Greece should give the money from the EU to survive.

This paper outlines a plausible scenario in which the Eurozone fractures in 2012. Events are unlikely to follow

In this research paper, we will be covering the causes, financial repercussions and social implications of this crisis. We will also be examining the methods used by the Greek government to rescue the economy. To conclude, we will discuss possible resolution measures and objectively forecast the future

The Eurozone debt crisis has been and continues to be a hot button topic in the economic and financial world with Greece at its center. As the possibility of the first default by a country in modern history looms over Greece there are a multitude of questions to be answered. This paper will focus on the effect joining the euro had on the Greek current account deficit. Was there a deficit problem before Greece joined the Eurozone in 2001? How did Greece’s deficit change after joining the Eurozone?

In 1999, ten European nations joined together to create an economic and monetary union known as the Eurozone. Countries, such as Germany, have thrived with the euro but nations, like Greece, have deteriorated since its adoption of the euro in 2001. The Eurozone was created in 1999 and currently consists of eighteen European nations united under the European Central Bank and all use the euro. The Eurozone has a one point six percent inflation rate and an eleven point six percent unemployment rate in 2014. Greece joined the Eurozone in 2001 and was the poorest European Union member at the time with a two point six percent inflation rate3 (James, 2000). Greece had a long economic history before joining the Eurozone. The economy flourished from 1960 to 1970 with low inflation and modernization and industrialization occurring. The market crash in the late 1970’s led Greece into a state of recession that the nation is still struggling with. Military failures, the PASOK party and the introduction of the euro have further tarnished Greece’s economic stability. The nation struggles with lack of competitiveness, high deficit, and inflation. Greece has many options like bailouts, rescue packages, and PPP to help dig it out of this recession. The best option is to abandon the Eurozone and go back to the drachma. Greece’s inflation and deficit are increasing more and more and loans and bailouts have not worked in the past. Leaving the Eurozone will allow Greece to restructure and rebuild

The economic crisis of 2008 in New York had ripple effects around the world, causing deep structural problems within the European Union to crumble the economies of several countries. These countries, known as the PIGS, are made up of Portugal, Ireland, Greece, and Spain, and collectively hold most of the sovereign debt problems of the European Union. After fast growth early in the decade, these countries were spending too much money and not securing their own banking sectors with enough capital. Soon, the debt the PIGS owed caused massive problems throughout the EU, and Germany and France had to come to the rescue of these poorly managed countries. (Greek Crisis Timeline, 1) Now, in 2012, the issue has yet to be fully resolved. Greece is still sinking, and a massive bailout for Greece's banks is required. The debate is whether Germany should continue bailing out Greece and collecting interest on its loans, or whether Greece should try to separate itself from the broader European Union, in an attempt to manage its own finances and declare bankruptcy in order to save itself from crippling interest payments. Each path offers an escape from the present situation that Greece finds itself in, but only the path of bailout results in a harmonious European Union. If Greece fragments off from the EU, then the entire union is weakened as a result. I believe that Greece should accept the terms of the bailout that Germany has provided, and should undergo several years

Although a commonly accepted view is that the hidden budget deficit in Greece is the beginning of the European sovereign debt crisis, the real causes of this economic crisis can be various. To reveal the whole event, a comprehensive review of the background is

The criticisms of the Eurozone keeps on rising from many people living in the region, as we can see early on this year Britain has voted for the Brexit. That leaves many people surprised, as well as leaving the economic stability volatile; the euro currency has been fluctuating in such a wide magnitude. Recently, the Italian Prime Minister Matteo Renzi resigned after the failure to persuade the country to come into constitutional reformation to leave the EU. That leaves many people ambivalent whether or not euro was a mistake.

In order to investigate the relevance of each theory in the EU today, I will look at the 2008 Eurozone crisis and apply both theories to see which better explains the situation of today, and the extent to which they are out-dated and possibly irrelevant. In this essay,

The European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM) are the current temporary instruments in the EU. It is a temporary instrument that has a lifespan of three years that is used to deal with the debt and liquidity crisis in the EU. This paper assess what needs to be done after the three years is up, which institutions needs to be formalized and the possible alternatives regarding the ongoing debate on establishing permanent instruments that can better work to support the stability of the Euro.

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.

Thus, the establishment of economic and monetary union and the introduction of the single currency and the ECB have become a part of an ambitious project, which, however, has never been completed due to lack of fiscal union. Also, one of the main reasons for a permanent disproportion in development is the unwillingness of Member States to transfer their own sovereign powers for creating a single supranational independent institution for the purpose of a single economic policy. In fact, the EU combines the different types of economy, which remains independent and managed by Member States. In the context of the existence of a single supranational monetary policy pursued by an independent institution - the ECB - the state, first of all, denied the so-called monetary mechanism allowing both the strengthen of the economic reforms effects, and the reducing of their imperfections. At the same time the single monetary policy is conducted without regard to differences in levels of development and in the economy structures of the euro area countries. One of the consequences of such political incoordination was the accumulation of public debt and growing fiscal deficits within the euro area, which average index has increased from 83.8 % in 2011 to 92.0% in