The Growth Of The Eurozone Essay

The ruling elites are getting richer at the cost to the citizens. Shut up and Take It confines the conversation between the top and bottom. The Elite shouts imposing austerity to member countries. The elites are masterful, and reduced the population to nothing and nobody in the streets. In addition, they are authoritative at using cheap stories to swindle the masses. Stories of honor to be a member adding special events to disguise true intend. The elite had to create chaos for states, and as a result capitulated believing a better life in the Euro Zone. Militaries from members were often used to conquer and divide. Globalization falsely disguised under a canopy of hope and freedom; instead the elites' bankrupt countries having great debt taking out more

The Global Financial Crisis revealed many flaws in the institutional framework of the Eurozone, as well as the flaws in the policies implemented in the aftermath of the revelation of the crisis. One of the major flaws revealed in the institutional arrangement of the Eurozone project, is the clause in the Maastricht Treaty which limits the ceiling on the ratio of the annual government deficit to gross domestic product. As a result of the Global Financial Crisis, The Maastricht Treaty put into place structural impediments that prevented member states from implementing counter-cyclical policies. It is likely that the crisis left a deep and long-lasting effect on economic performance and overall social hardship. Job losses were contained for some

The article “Eurozone’s Drop In Inflation Carries More Fears Of Another Recession” from the New York Times, written by Jack Ewing, discussed of how inflation has dropped in the Eurozone to its lowest rate for nearly five years and the threat of Europe falling into deflation leading to another recession. The optimal or ideal inflation rate for Europe is at 2% and with its inflation rate dropping down to almost 0% borderline, more pressure is being added to the Europe Central Bank. Europe must come up with an aggressive plan to revive its weak economy.

Over the 15 years the German has been widely viewed as the economic catalyst and stabilizer for its fellow European Union states. Even following the Financial Crisis in 2008, the German economy was able to bounce back quicker than neighboring Eurozone states the source of German success points to a high export led growth economy with a competitive manufacturing sector, lower unemployment, balanced budget, and low costs to borrow. With most economic indicators pointing to strong future growth, it remains to be seen whether a spillover effect occurs to the rest of the EU. Despite a number of reforms, EU countries continue to suffer due to lack of global competitiveness. In dire straits, Greece continues to leverage the support of the European Central Bank and Eurozone states to avoid another financial collapse. In support of Greece, Germany itself lent the country €56 billion, however Germany has begun to lose patience over Greece’s attempts to renegotiate terms of its bailout. As the German economy has persevered through economic turmoil, while Eurozone has struggled, Germany continues to be a shining light of prosperity in the European Union.

The global financial crisis of 2008-09 that spread contagiously across the globe has particularly hit the European economies hard, accentuating turmoil in the world financial markets and precipitating the European sovereign debt crisis almost instantaneously. This has consequently wiped away all of the EU’s accomplishments in economic growth and job creation (European Commission, 2010a:3). Statistics published subsequently exposed the magnitude of the crisis: real GDP contracted by 4%, unemployment soared at an unprecedented level, public finances deteriorated, and social cohesion in the EU has fragmented (Eurostat, 2010). The crisis has also exposed the fundamental weakness of the Union, especially in the face of new challenges from emerging market competition, an ageing population, and depletion of resources. Therefore, the Europe 2020 strategy adopted by the European Commission in 2010 introduces a new growth model for the EU to respond to the various challenges mentioned above, particularly the global financial crisis. (European Commission, 2010a:5).

After the long awaited single currency implementation known as the euro, there have been many ups and downs to this monetary system. Many have been quick to criticize while others still praise its value claiming it will soon be valued strongly against the dollar. Our paper looks into the various aspects of the euro and the progress it has made since its initiation. We begin with a brief history of the euro then move on by raising some questions concerning the effects of the euro on various economic aspects such as competition and global financial institutions. We then provide insight to the various strengths and weaknesses of the euro and the implications this currency has on various institutions such as banks.

“Critically evaluate the roles of the main EU institutions (Council, Commission and Parliament) in the management of the continuing economic/financial crisis”

The global financial crisis has caused a massive deterioration in public finances in the euro area. The 2009 recession severely curtailed public revenues and weighed heavily on the welfare state. In addition, states have boarded on bank bailouts and costly stimulus packages. In 2010, no country belonging to the euro area was able to comply with the Stability and Growth Pact (SGP). Public debt in the euro area increased from 65% to 85% of GDP between 2007 and 2010.

Two bailouts later, with the third quickly approaching, Greece has shown the European Union that its austerity measures are not a viable or sustainable option for debt relief. With the spiraling decline of investor confidence in an economy severely trapped by debt, Greece has been under threat of being dismissed from the European Union. As of July 14, 2015, Greece’s third European Union bailout was left just out of arms reach until the nation follows through with, what has been termed ‘Draconian,’ reforms aimed at minimalizing Greece’s debt. Although Greece makes up just 2% of the European Union population, its weighted economy and potential impact on the global economy is on everyone’s mind.

The euro zone which is officially called the "euro area" consists of 17 countries. In other words, it consists of countries which are also part of the European Union. The European Union consists of approximately 27 member states. For a country to be a member of the euro zone it is necessary for it to be a member of the European Union. A single currency was introduced as a result of European union reforms and the currency was named as the "Euro". Those countries which adopted the Euro as their currency by giving up their local currencies became the member states of the Euro Zones. These countries include: Austria, Belgium, Estonia, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

EU is an important economic group in the world. And now EU is the second biggest agribusiness partner to New Zealand in the world. EU has sufficient natural resource and has created a big number of agribusiness employments. Also, EU has compared better agriculture supply chain which providing verity agribusiness production to domestic and international markets. In addition, it is necessary to notice there is a huge market which could be an opportunity to export. As a unit, EU successfully supports their local farmers and development of agriculture. However, it still gets some issues which challenge their agriculture in future.

Economic growth refers to the rate of increase in the total production of goods and services within an economy. Economic growth increases the productivity capacity of an economy, thereby allowing more wants to be satisfied. A growing economy increases employment opportunities, stimulates business enterprise and innovation. A sustained economic growth is fundamental to any nation wishing to raise its standard of living and provide a greater well being for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced over a year. It is the total value of production within the economy. The total value of production is the total value of the final goods or services less the cost of

The social circumstances in the countries are mainly impacted by unemployment rates and general standards of living. Unemployment rates in 2006 (see fig. 4) are well below EU average in Switzerland (3.9%). This figure is higher in Portugal (7.8%) and Denmark (4%). Moreover, living standards in Denmark (government welfare measures) and Switzerland are reported to be comparatively high.

Furthermore, the Fund also recognized that after nearly four years of “internal devaluation,” the economic strategy had not succeeded. The idea of an “internal devaluation” is that if you create enough mass unemployment and push wages down far enough, the economy can become more competitive due to lower labor costs. This allows exports to grow, and import-competing industries to also do better, improving the trade balance. Since exports add to economic growth and employment, and reduced imports do the same, the economy can recover in this scenario due to increasing net exports (exports minus imports). Normally this could be attempted through a devaluation of the currency. But the troika has only recently shown any intention of trying to push the euro’s value down against external trading partners; and of course since it is a common currency, the more depressed economies within the currency union can’t devalue against the others (e.g. Spain versus Germany). This leaves “internal devaluation” as the remaining hope for recovery for countries such as Spain, Greece, and Portugal. In other words, despite the negative impact of the fiscal austerity, the theory is that “internal devaluation” based on lower labor costs can drive recovery based on the growth of net exports.

The Economic reasons for the euro project can be found in the relatively poor performance of the European economies over the last twenty years or more. Europe has, for a long time, suffered form