Europe’s economic union under threat
It looks the world leaders are looking at Europe for any positive outcomes on economy. Their hopes lie on success of Spanish Bank bailout and keeping Greece into the Euro zone.
The uncertainty of European economy has prolonged more than expected. The European leaders had expected, they would tame the problem when Greeks were given the bail out package. The problem was not just a country, but a whole system, thus giving solution to a part is not solution to the whole. Feeble economy in the continent is unlikely to be carried on by Germany for long. Things have overturned in the economy revival struggle due to sudden change in political sphere in France.
Greece is moving for second parliamentary election next week. The communist victory, if, in the country is certain to split the union, thereby questioning the sustainability of single currency.
Despite threats and bleak picture of economic future, European leaders are hope for better outcomes. The greatest challenge for the union leaders is to convince the market that they will fix the problem created by the currency. Efforts are on, and on.
German Chancellor Angela Merkel showed a readiness to move forward last week, saying “We need more Europe. We don’t only need monetary union, we also need a so-called fiscal union. And most of all we need a political union.”
Crash in Europe will have huge impact on United States. The recent figures who that US economy is facing a monthly deficit of nearly $50 billion. Shrink in Europe will further deepen the crisis in US. The largest growing economy, China will also face damage but now much as the country has already started looking at huge domestic market for its growing productions.
Europe fall will affect the US presidential election in November. Barak Obama is putting more pressure on European leaders for stringent actions, as part of seeking re-election to White House in November. He knows trouble in Europe will pull the rope of US economy down. Being criticised for 1.9 per cent growth, Obama will have to think of being re-elected if no better symptoms are seen in near future.
Europe’s economy has been struggling under these circumstances for several years now. It has never come to peace since the world recession of 2008. And some experts blame it for impractical economic union while others say it’s the end of capitalism.
In fact, the cause of crisis in Europe is inherent. Michael Lewis has documented quite tellingly in Boomerang the dysfunctional country that is Greece – how citizens avoid taxes, how over 600 categories of workers can retire at the age of 50 with full pensions, and how fraud and corruption are endemic. Other stories have surfaced about how few doctors report more than 10,000 euros of income and how few professionals pay their property taxes.
The market failure in Europe is more visible due to open market system. Had that been the picture in Asian economic system, it would have never survived. Thus, Europe’s experiences are corner stones for the governments around the globe to have control over market and trade.