News / Economy

Eurozone Faces Contentious Choices to Save Currency

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

As US Strikes Syria, China Sees Parallels at Home

Beijing is debating how much support to give international coalition against IS militants and trying to figure out how many Chinese nationals may have joined group overseas More

CDC: Ebola Could Infect 1.4 M by 2015

US health officials say if efforts to curb the outbreak are not increased, cases will soar dramatically by early next year More

Video USAID Provides $231 Million for Girls Education in 5 Countries

US Agency for International Development partners with celebrities to call attention to importance of education for girls worldwide 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.
NASA’s MAVEN Probe Enters Mars Orbiti
X
September 22, 2014 9:20 PM
NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7768
JPY
USD
108.84
GBP
USD
0.6124
CAD
USD
1.0999
INR
USD
61.042

Rates may not be current.