News / Europe

Financial Crisis Roiled Euro Zone in 2010

Financial Crisis Roiled Euro Zone in 2010
Financial Crisis Roiled Euro Zone in 2010

Europe's single currency, the euro, was supposed to merge European countries into one robust monetary union. But the euro zone is as weak as its weakest link and that's a reality that can't be ignored as 2010 comes to a close. The financial crisis tested the bonds that hold Europe together and left a question mark over the future.

Recent protests in Ireland were typical of Europe in 2010.

Sovereign debt, spending cuts, and social unrest were a familiar sequence across the EU.


In 2010, Europe's single currency, the euro, was put to the test.

Greece was the first hotspot. The massive debt meant markets lost confidence in the country's ability to pay up.  

European leaders scrambled to strengthen the weak link, pouring more than $100 billion into the Greek economy. And creating a fund for future crises.   

Only six months later, when Ireland faced its own financial crisis, the money it needed was available.  

Iain Begg from the London School of Economics says it showed the euro can weather the storm. "This is characteristic of the way Europe operates.  It waits for something to go wrong and then in the process of finding a solution moves forward to a greater degree of integration, while still respecting the rights of individual member states," he said.

But even stronger economies, like France, face major debt. Cuts in public spending have sparked repeated strikes and massive protests.  

And leaders have struggled to balance the needs of their own countries with those of Europe.

Even Germany, long a key motor for European unity, hesitated before using taxpayer money to bail out other European economies.

National needs remain a top priority, says Begg. "It was never really going to be a United States of Europe and more a united Europe of states, and that's really what we're seeing now," he said.

After two World Wars tore the continent apart, visionaries imagined a Europe at peace, united politically and economically.

Simon Tilford is chief economist at the Center for European Reform. He says the financial crisis has left that vision in tatters.

"Unfortunately, the necessary solidarity has been eroded by the financial crisis. The electorates of countries that have been asked to guarantee loans to the other member states are strongly resentful of that because they think why should we do that. We're rewarding them for their profligacy, or what have you.  And that makes it much harder for governments to actually argue the case for the kind of integration necessary to put the whole thing on a more sustainable footing going forward," he said.

That might also be a major problem in the coming year.

Portugal, Italy and Spain could soon need bailouts of their own.  

And it could be difficult for European leaders to convince their electorates to dole out more cash.

Vanessa Rossi, from the research group Chatham House, says in 2011 Europe will have to decide on the strength of the bonds that hold it together. "The choice here in the system is for the member states to decide, are they going to have a club where they guarantee to back every member whatever  the cost and whatever the circumstances.  Or are they going to have a union where they say, no, we actually will accept that sometimes member states can have difficulties and that the investors in those member states will have to share part of the haircut, part of the pain, when the restructuring happens," he said.

Or EU countries could be allowed, she says, to default on their debt.

But that could mean the unraveling of the EU and the end of a dream built over many decades.

You May Like

Australia Knights Prince Philip, Sparking National Outrage

Abbott's surprise reintroduction of knights and dames in the country's honors system last year drew criticism that he was out of touch with national sentiment More

SAG Award Boosts 'Birdman' Oscar Hopes

Individual acting Oscars appear to be sewn up: SAG awards went to artists who won Golden Globes: Julianne Moore, Eddie Redmayne, Patricia Arquette, J.K. Simmons More

Katy Perry Lights Way for Super Bowl's Girl Power Moment

Pop star's selection to headline US football championship's halftime show extends NFL's trend of selecting artists who appeal to younger viewers 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.
Zoo Animals Show Their Artistic Sidesi
X
June Soh
January 23, 2015 10:03 PM
The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, even music are part of the Smithsonian National Zoo's program to keep the animals happy. Faith Lapidus narrates a report from VOA’s June Soh.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, even music are part of the Smithsonian National Zoo's program to keep the animals happy. Faith Lapidus narrates a report from VOA’s June Soh.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.
Video

Video US Marching Bands Grow Into a Show of Their Own

The 2014 Super Bowl halftime show was the most-watched in history - attracting an estimated 115 million viewers. That event featured pop star Bruno Mars. But the halftime show tradition started with marching bands, which still dominate the entertainment at U.S. high school and college American football games. But as Enming Liu reports in this story narrated by Adrianna Zhang, marching bands have grown into a show of their own.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid