Financial Crisis in the European Union Fails to Remedy Continent

Author Bio: Kevin Craig is a financial writer associated with Oak View Law Group. He has helped many indebted people to get out of debt by giving them proper financial advice for debt settlement.


The state of European economy is not very assuring right now. People are apprehensive to invest as they think that financial crisis in one European country will rapidly spread to other countries of the continent. The current economic instability originated from Greece, a relatively stable nation. The European nations may have to make their business relations stronger with their neighbors in order to overcome this situation.
As the economic year ended in the month of April, Greece witnessed a substantial hike in the interest rates. This had a profound impact on the stock market which collapsed badly. Investors were nervous that many companies will succumb to debt and their money will be lost.
What exactly happened to Greece? It has been actually offering expensive social programs to win the hearts of its citizens. This resulted in a financial deficit. Financial experts were eventually hired to create a smoke screen and reduce the deficit in the budget. It is explicit that Greece tried its best to satisfy the guidelines of the European Union (EU). Since the Greek economy has collapsed, people are not too sure now about the effectiveness of European Union policies. Greece, meanwhile, has turned backed towards its old and very own ways of handling things.
The European Union endeavors to encourage economic fraternity among the countries of the continent. However, this is no mean feat. These countries are not only different in terms of culture but are also highly independent in nature. The European Union members (27 in total) use Euro (as currency) for legal tender. The economic strategies are formulated and implemented from the European Central Bank in Germany. EU has a clear financial policy to control the economy through interest rates. To combat a recession, it proposes lower interest rates to encourage organizations to borrow money and encourage people to buy expensive products. In case of inflation, EU advices to raise interest rates which will reduce the investment and purchasing rate.
In spite of the above policies, EU has negligible power to control and influence the tax and spending plans of the member countries. The policies of EU and its members clash frequently and create a tension which aggravates especially during financial meltdowns. The economically strong countries namely Germany, Italy, France, Britain accuse their financially weak neighbors like Romania, Poland, Slovakia (to name a few) as reckless. Also, they are reluctant to extensively look after the economically weak nations. This creates a tension among the two blocks. Some experts term this as neo cold war. This is a blow to the economic solidarity that EU tries to promote and renders the European economy weaker.
If the dream of European economic unification turns into reality then the collective strength will threaten even the economic might of the US. As of now, the situation looks bleak. The euro seems to have no chance against the dollar, the value of one euro being $1.20. The US economy is not doing well very either. Can Europe surpass it? We are not too sure.



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My name is Kevin, and that's my opinion. What do you think?

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