Euro Crisis Essay

Euro Crisis Essay

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The recent economic crisis in the European Union (EU) over the common currency, the euro, has led to great concerns of what will eventually come of the EU and its currency. As the crisis continues, the role of domestic politics and the negative effects they had on the EU as an institution become apparent. Countries, especially Greece, began to ignore the most crucial aspects of EU agreements, most notably the Maastricht Treaty of 1992. In the Maastricht Treaty, the Greeks ignored basic economic guidelines that must be in place in order to retain membership in the EU with many of the member countries looking the other way. As the Greek domestic policies began to take a toll on its economy, the EU broke its own treaty to help them out. However, this fight to help Greece out would tear the European Community apart, but not destroy it.
The domestic policies that Greece put into place before and while in the EU have only exacerbated the difficulty of international cooperation. Greece’s inability to control its government spending has drastically hurt the euro. For example, right before its financial collapse Greece’s spending was on par with many European nations. Like most major nations, however, Greece relied mostly on borrowed money to pay for its debts and its government spending. The other fact that did not help the Greek economy is that Greeks often did not pay their taxes: the country had a debilitating tax evasion problem. With its citizens not paying taxes and Greece’s economy mostly socialized, the government was soon to run of money. When the housing bubble burst, unemployment rose along with people receiving welfare on the few taxpayers’ dime. With little incoming revenue and a growing populace depending on assistance fro...


... middle of paper ...


...mises get larger, one begins to wonder where the money for these packages is coming from, but most importantly, one wonders if the EU will survive this turmoil.
As international cooperation begins to deteriorate in the EU, due to each country’s own handling of its debt, the tension between the countries began to grow. Some believe that the EU will collapse as the euro eventually becomes worthless due the constant borrowing to pay for the governments’ bailouts. While there is a chance of a collapse, the possibility remains almost non-existent. At most, Greece will either have a slight default or leave the EU.



Works Cited

Thomas Jr., Landon. "PAYBACK TIME: Patchwork Pension Plan Adds to Greek Debt Woes." New York Times: Global Business. NY Times, 11 Mar. 2010. Web. 27 Mar. 2012. .

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