Is the future of Eurozone in trouble? FT
Is the Eurozone crisis about to end or will it be a continuous standstill?

Gunter Grass had once stated that: “The European Union arose on an economic foundation, and it turns out that even this is not a solid base.”

The aforementioned, questionable economic foundation, with the questionable base has, across time, faced its ups and its downs within the heart of the European debate, a debate that plagues the Euro zone questioning if it can continue with the same modus operandi, despite the on growing economic stagnation.

However, this time, with all of the problems that the EU faced in the last 6 years (Brexit, Greek financial crises etc.), the challenges it faces are extremely difficult to overcome without shifting aspects of its policies. A crucial change, much needed for the rest of the wounded economies, a change that will signify support, via a plethora of economic packs that can only benefit and bring them back to growth rates.

Some of the problems that the Eurozone is currently facing, and simultaneously can question the future of the Euro:

1.   First of all, comes, in terms of economic growth, the problem of Youth unemployment across the member states of the European Union. Spain, Italy, Portugal and Greece currently have the biggest unemployment rate. The high unemployment rates can also provide a fertile breeding ground for resentment in the political incredulity and scepticism about the euro.

2.   The sovereign debts and burdens are fairly high in respects to production and GDP. It currently ranks more than 110% of annual national income or GDP in Italy and Portugal and in excess of 100% in Ireland, Belgium and Cyprus.

3.   Terrorism costs a lot of millions to major countries of the euro zone like Germany and France and, subsequently the rest of the EU.

4.   Growth has been sluggishly slow and the state finances are on average stretched. Annual borrowing needs and total debt are both relatively high.

5.   Grexit rumours and Brexit results affected a lot the sustainability of the Eurozone and the EU

6.   Last but not least, a great amount of the households in the EU struggle to meet basic needs like insurance, housing, healthcare and/or education.

Thus the thesis that arises is that these problems already caused due to the fluctuations of the world economic, international political economy, have negatively impacted the Euro, causing both doubts and frustration about the future of European Union the Eurozone and the sustainability of the Euro.

Below for example, we can see the results of the Eurozone Economic Growth between the years of 2004-2015

From the abovementioned graph it’s clear that the years: 2008, 2012-14 had some negative growth rates.

On the other hand, despite these tremendously large problems, as seen above, European leaders, and more specifically the exhibition of Five Presidents, tried to settle and strength the Economic and Monetary Union (EMU) by deepening the way the old economy policies work in an action plan in order to to boost finance, prevent the future economical problems of the Eurozone and save Euro from potential collapse.[1]

This long-term action plan of the five presidents of Europe's key institutions for deepening the EMU, are extremely pressured due to the sluggish economy and 18 million unemployed. The five presidents of the main EU institutions submitted a joint report in 2015, to deepen the EMU in an attempt to avoid another future, potential crisis.

 



[1] (source European Commission - Press release)