It seems in the news at the moment that everywhere you turn there’s some form of crisis. The most well known of these is currently the economic crisis, which is something we are all feeling the effects of strongly, but as well as this there’s then the environmental crisis, the energy crisis and now the Eurozone crisis. So what is the Eurozone crisis, and is it something you need to be concerned about?
The Eurozone is a term used to describe the region of countries using the Euro (currency). This then includes many of the countries of the EU such as Germany, France and Greece, but not all of them (countries like England and Poland still use their own currencies). The Eurozone ‘crisis’ then refers to the plunging value of the Euro caused by the economic crisis and amplified by the multitude of countries using the system. The problem is, that while one country might be coping well with the financial hardships, others that are fairing less well (such as Greece) can end up pulling the value back down making it a vicious cycle and one that is hard to escape from. Germany has been shouldering much of the brunt of the economic turmoil and handing bail outs to Greece, but this not yet enough
Other causes of the Eurozone crisis include too much debt from the member states, a lack of competition between the countries, the differing mechanisms of the various economies tied to one currency, and disagreements coming from the lack of a single authority and so many different member states each with vested interests – a ’17 headed hydra’. Criticisms have been leveled at the very idea of a single currency which some skeptics see as unstable and unfeasible.
This Eurozone crisis however is not a problem that is contained to Europe; rather it is one that affects the rest of the world through investments, debt and trade and that is risking serious global economic decline. I is in every one’s best interests to solve this crisis as soon as possible. Many meetings have been held between the member states of the EU to this end, but as yet no satisfactory solution has been found.