The Eurozone Crisis Across Europe

European identity, meaning unification or integration of Europe, is associated with the European Union (EU). The EU includes 28 member countries, more than half the European countries have already joined the EU for years and thus the EU unifies Europe. The Eurozone crisis is an ongoing crisis that has been affecting the countries of the Eurozone since early 2009, when a group of 10 central and eastern European banks asked for a bailout. Consequently. The crisis has made it extremely difficult for countries such as Greece to refinance their government debt without the aid of third party such as the European Central Bank (ECB) or the International Monetary Fund. Many may argue that the Eurozone crisis is over. In fact if the Eurozone crisis was really over, then Greece wouldn’t still be requesting for aid as Figure 3 shows increasing debt from 2009 onwards or Spain’s unemployment rate wouldn’t stop rising as Figure 2 shows. Consequently, economic growths have been slow and the sovereign debts have accumulated, making the Eurozone crisis is far from over until economic growth and unemployment is stabilized.

The Eurozone crisis across Europe can be blamed on the collapsed globalization of finances, international trade imbalances, and the bubble of the property market. For example, Ireland’s banks created a huge housing bubble due to banks lending money to property developers. This action have steered some of the countries in the Euro such as Ireland, Italy and Greece to drive up their sovereign debt relative to their GDP. “Rochet and Tirole use monitoring as a means of triggering correlated crises: if one bank fails, it is assumed that other banks have not properly monitored and general collapsed occurs”. (Allen and Gale, 2000, pp. ...

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...y be minimal as inflation is not taken into account.

In conclusion, it was a matter of time before the Eurozone will end up a crisis like the one of 2009. When Greece joined the Eurozone it didn’t meet the Maastricht criteria. Many other countries such as Germany has also been allowed to enter the Eurozone regardless meeting the criteria. Germany took at least 7 years until they are actual eligible to join the Eurozone. How can we say that the Eurozone is viable when they policy maker institution can’t even follow the policy that they created. Failure in following established policies will hinder economic recovery of the Eurozone and test their viability. However, behind all the polices introduced or suggested policy making institutions are a generation of monetary institutions that can react quickly and on time to generate sufficient reforms to hold it together.