Despite all the efforts by the European Central Bank and the International Monetary Fund, the debt problems in the Eurozone continue to threaten the continent’s economic future and send shock waves across financial markets around the world. In the latest development, ECB President Mario Draghi has promised “possible” intervention to kick start Europe’s lagging economy – but no action will come until at least September, the next time the ECB meets.
This lack of action has left markets around the world sinking deeper and the bonds for the most debt-laden countries like Spain and Italy skyrocketing. The financial woes in Europe have been ongoing for at least 4 years and there doesn’t seem to be any solution in sight. Regardless of what decision the ECB makes, there are a few fundamental changes that have to happen to get Europe back into the black.
Greece Has To Leave The Euro
One of the major issues plaguing the E.U. is Greece and its inability to get its economy in order. Billions of dollars have been pumped into the Greek economy, leaders have changed and some of the most strict austerity measures have been brought in – and nothing has changed. All the money that is being used to save the Greek economy is coming from other E.U. nations that have no debt issues, and these moves continue to make those countries more vulnerable.
Europeans Need to Get Back to Work
One of the major issues across Europe is high unemployment. From Portugal to Spain to Greece, people can’t find work. If less people are working, less income tax is being collected and the economy remains stalled with people afraid to spend money on any big-ticket items. Rather then pumping more money into rescue programs, more money should be spent on economic stimulus. Smart spending on infrastructure projects and business development will mean better long term prospects for the countries with even the worst debt issues.
The U.S Needs to Step In
Even though the U.S. is still recovering from the 2008 economic downturn it remains the world’s biggest economy, with the ability to rescue any nation. If the U.S is willing to help the E.U. by offering money or greater business and trade, there is a better chance the E.U. can get back on track. But with anemic recovery in the U.S it could be many years until it can offer substantial help.
One of the major issues with the Euro-debt crisis is the lack of solidarity. Whether it’s a bailout, new austerity measures, a change of leader or a new policy, there is always divide among the nations. A continent-wide referendum on what is the best course of action for the Eurozone would put its citizens on the same page and create a situation that every person living within the E.U. will feel responsible for.
The Eurozone troubles are not coming to an end anytime soon, but changing the way the world has handled them so far will at least create some new hope that they can be fixed. Unfortunately, without a viable solution, the E.U. debt crisis will continue to bear down on economies around the world, including Canada’s.