
Greece, Italy, Portugal and Spain face years of low growth, severe budget cuts and perhaps social unrest. Whatever the fate of the euro, the prevarication and long arguments over how to help it have damaged the EU Germany and France’s relationship have been deeply affected. Germany thinks that they should have “stricter” rules for countries who borrow too much. France “stresses that governments need to discuss each other’s policies and performance, as well as imbalances within the eurozone” (Charles Grant). Then there is also Greece who, as everyone knows, has been most affected by this euro crisis. “Skeptics have long argued that the euro is not actually a currency. It is an experiment. The hope of the Euro experiment was that 16 different countries could band together, under one united monetary policy, while yet preserving wholly separate cultures, political structures, and economic climates.” . Now there are hundreds of questions being asked about what is going to happen to the PIIGS (Portugal, Italy, Ireland, Greece, and Spain)? The more wealthier countries refuse to help so could these countries be slowly dying out? The Euro has brought nothing but stress to Europe and I would say everyone could agree to that. According to Greek economics professor Savvas Robolis, Greece now has “explosive unemployment” in its future. “Panic is slowly taking hold in the minds of the [Greek] people,” he says. So whats next? Destoy the Euro? Well wouldn’t we love that except for the fact that Jean-Claude Trichet, in charge of the European Central Bank, will not admit to his failure.
This is how the Euro works. If the U.S. was to join the Euro, it would be like having the value of $1.49 go down to about $1.39. It lowers the value of money which can really mess up the economy and thus destroy the country.
One main reason this is affecting Greece so deeply is because their financial escape in not a choice. When countries go through a depression such as this one, they devalue their currency and lower their interest rates to maintain stability. Since they run on the same currency as many other countries that do not have the option to just change things. The European Central Bank will not allow that to happen and it is hurting Greece very much. They can not just go back to the Drachma, their old currency, because Greece is now a member of the European Union. If they could just go back to the Drachma and keep the benefits that they have from being in the European Union then that would definitely be their choice, but unfortunately, things are just not that simple.
“ Europe has its hands full at a whole other level. Spain is confronted with unemployment of over 20% and young males are experiencing unemployment of over 45%; Portugal and Ireland have banking systems that are in tatters and Greece has set the bar as far as going into and out of bankruptcy.”. This all because they are combined into the Euro. If the wealthier countries would even help out a little, such as Germany, the PIIGS would maybe have a chance at getting themselves out of this hole. It is an unfair situation and they need help.
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