Being from Europe and having money invested back home in Germany, I follow the news on a regular basis, especially related to the European debt crisis. The euro was initially introduced in 2000, as the next step in creating a stronger and closer Europe. While especially the media in Germany questions the use of the common currency and its burden for the German taxpayer, the German economy highly benefits from the euro as it is one of the strongest export economies worldwide.
When countries like Greece or the eastern European states joined the Euro, they were suddenly able to borrow huge amounts of money for relatively low interest rates as opposed to before, when their old, weaker currency didn’t allow this. As in Greece’s case, this borrowing got out of hand and some of those countries are now facing the consequences or even bankruptcy.
Everybody knows that the more people you want to agree to something, the harder it gets to reach a solution. This is exactly what’s happening right now: Every country has to ratify the expansion of the euro stability fund, essentially lending or giving money to those almost bankrupt countries. Slovakia voted for the expansion today as the last of the euro members, but not without the former government disbanding. It will be interesting to watch the development of the common currency, I personally believe that Greece will go bankrupt and one can only hope that a spreading of the debt problem can be avoided before another worldwide financial crisis starts to build up – the Lehman Brothers bankruptcy and its aftermath was a mere two years ago.
When countries like Greece or the eastern European states joined the Euro, they were suddenly able to borrow huge amounts of money for relatively low interest rates as opposed to before, when their old, weaker currency didn’t allow this. As in Greece’s case, this borrowing got out of hand and some of those countries are now facing the consequences or even bankruptcy.
Everybody knows that the more people you want to agree to something, the harder it gets to reach a solution. This is exactly what’s happening right now: Every country has to ratify the expansion of the euro stability fund, essentially lending or giving money to those almost bankrupt countries. Slovakia voted for the expansion today as the last of the euro members, but not without the former government disbanding. It will be interesting to watch the development of the common currency, I personally believe that Greece will go bankrupt and one can only hope that a spreading of the debt problem can be avoided before another worldwide financial crisis starts to build up – the Lehman Brothers bankruptcy and its aftermath was a mere two years ago.
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