News / Economy

Eurozone Faces Contentious Choices to Save Currency

TEXT SIZE - +

Europeon Debt to GDP Ratio

As European leaders attempt to defuse the continent's debt crisis, they are confronting contentious issues over national identity, vastly different economies and how much power should be centralized to control the spending of individual nations.

The fate of the eurozone - the 17-nation bloc that uses the euro - hangs in the balance, as well as the threat of a worldwide recession if the crisis is not resolved quickly.The European debt crisis has now extended for two years. The continent's leaders are under increasing pressure to take decisive action to assure international financial markets and keep the debt contagion from spreading. The key current fear is that Italy, with $2.6 trillion in debt, may need a bailout, and that Europe would be unable to cope with such a large potential default.  

Brussels meeting

The eurozone finance ministers meeting in Brussels Tuesday were faced with meshing the political and financial interests of diverse countries -- from economic powerhouse Germany, with a $3 trillion national economy, to the tiny island nation of Malta, with a $10 billion annual economy. Then, early next month, European leaders are holding a summit to discuss their options.

The key idea under consideration would force the 17 nations to cede sovereign budget control to a new central authority, likely in Brussels, that could force new austerity measures on such debt-ridden countries as Greece, Portugal, Ireland, Italy and Spain. The idea is to force the eurozone's weaker governments to adhere to strict spending standards to prevent the need for more international bailouts.

But such central control has long been anathema to European governments and was until now unthinkable in the eurozone. Numerous governments fear the loss of their national identity and control over their destiny.

Debt sales

Various new types of debt sales have been proposed as well, such as the creation of euro bonds, encompassing the debt of the 17 nations, not just that of individual countries. But Germany, and other strong economies in northern Europe, have so far resisted that concept for fear that their top credit ratings would be sharply diminished and their borrowing costs increased if they had to help pay for the debts of weaker governments on the eurozone's geographic periphery.

Under another variation, only countries with the top credit ratings could band together to sell their debt.

Some analysts have suggested that the European Central Bank needs to increase its funding for individual nations, another idea Germany has so far opposed, again fearful that its AAA credit standing would be diminished.

Some information for this report was provided by Reuters.

You May Like

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

John the XXIII and John Paul II will be made saints in a ceremony at St. Peter’s Square on April 27 More

Thailand Reacts to Plots Targeting Israelis

Authorities hope arrest of two Lebanese suspects will disrupt plot to attack young Israeli tourists More

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

'Once Upon a Forest' takes viewers deep into heart of tropical rainforest More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.