Thursday, 21 June 2012

euro crisis issues

Challenges facing the Euro Zone

1/ Little common fiscal policy

Big differences in size of fiscal deficits and debt levels

Fiscal stability pact has effectively collapsed

nyt interactive european debt levels

2/ Growing risk of one or more Euro Area countries defaulting on some of their debts

Will Euro Area nations bail out fellow members?

Years of fiscal austerity for some nations will create deep economic and social pressures

3/ Doubts about the likely strength of recovery

Unemployment high and rising

4/ Longer term challenges
Larger economic imbalances within the 17 nation currency union over wage levels, trade balances and productivity will also need to be addressed if the Euro Zone is to avoid future crises

Several weaker countries have become uncompetitive inside the Euro and this requires painful corrective policies which will be unpopular

crisis issues

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