Problems The Eurozone was Facing in 2011-2012 due to Poor Performances Essay

Problems The Eurozone was Facing in 2011-2012 due to Poor Performances of Some Members and Their Resolving - Essay Example political, economic, financial and social challenges facing the Euro zone along and also explains the measures that can be taken to solve the crisis threatening the collapse of the Euro zone single currency – the Euro. Current political, economic, financial and social challenges facing the Euro zone Political problems in Eurozone Stiglitz (2011) has pointed out that more of political in nature rather than economic. In his opinion, â€Å"If Europe issues Eurobonds, debts are manageable. Even a 150 per cent debt to GDP ratio can be handled if interest rates are low enough, but if rates are high they cannot be†(Stiglitz, 2011). Many people have the illusion that the Eurozone problems are caused by economic factors rather than political factors. Such people believe that Europe is comparatively a stable political region and therefore political problems have fewer roles in causing any challenge to the functioning of Eurozone. However in reality, as in the case of many other r egions in the world, political problems are causing more damages to the ambitions of Eurozone to become the strongest economic power in the world. For example, Greece is one Eurozone country which is facing huge financial problems now. Kotios et al, (2011) have pointed out that the inconsistent economic policies of Greece have contributed heavily to the downfall of Greece (Kotios et al, 2011, p. 263). Greece adopted some kind of economic policies which were unsuitable to the needs of the current economic climate. Their inconsistent economic policies affected Greece as well as Eurozone. â€Å"The European Central Bank is under pressure to bail out indebted countries by printing more euros. But it really isn't as straightforward as that† (Obama Accuses Eurozone of "Problem of Political Will", 2011).... This paper describes the full range of political, economic, financial and social problems, that the Eurozone was experiencing in the years, following the global financial crisis. The crisis exposed weaknesses in Greece economy, as well as in economies of some other members. That economic problems in turn became the threat to the existence of the single currency. The paper also reviews set of economic measures introduced by the members in 2011-2012, that were aiming at overcoming the aftermath of the global crisis The member of Eurozone countries have adopted Euro as their currency in order to reduce the formalities in money transactions of economic transactions between these countries. In short, Eurozone can be defined as a geographic and economic region that consists of all the European Union countries, that have fully incorporated the euro as their national currency. The inconsistent economic policies of Greece have contributed heavily to the downfall of Greece. Greece adopted some kind of economic policies which were unsuitable to the needs of the current economic climate. That affected Greece as well as Eurozone. The ECB was under pressure to bail out indebted countries by printing more euros. Still, many of the European countries were against printing more euros to assist Greece like nations. The absence of centralised political management was causing problems to the functioning of Eurozone. Each member countries were functioning independently and the political control of Eurozone over member countries was negligible. Economic problems in some Eurozone member countries were causing problems in all the other members. Some ot them believed that the poor performances of Spain and Greece were retarding their growth also.