So I was reading this article, http://www.washingtonpost.com/world/europe/merkel-wins-german-lawmakers-backing-for-plan-to-boost-bailout-fund/2011/10/26/gIQA1R5KJM_story_1.html, and it discusses the economic problems Europe is currently facing, not only with Greece but throughout the continent. The European Union is convening to discuss a second bailout for Greece and to determine how to stabilize the euro for the future. They plan to rely less on short-term loans and ask banks to raise more capital to prevent the decline of the euro due to losses on bonds.
Europe is facing some fairly serious economic problems right now, and although the media tends to focus on Greece, many other countries are going down a similar path. How do you think the EU should handle Greece's economic problems. If Greece's economy completely shuts down, that could devalue the euro and cause problems throughout Europe. On the other hand, they obviously can't just hand over billions of dollars and hope everything goes according to plan.
Another problem is that the countries within the European Union can't seem to agree on what to do, either. Each has its own idea of how much money to give Greece, how to structure the bailout, and what the future of the bank plans will look like. With tensions running high, it is important to resolve the issue quickly, but the EU is having trouble hammering out a plan.
Furthermore, the problems that Europe is facing have caused big moneylenders to pull out of the European economy, further destabilizing it. The United States has stopped investing in European banks, particularly since several main banks crashed. This is due in part to the short-term loans that the banks operate on, which is another issue the EU plans to discuss when they convene. What do you think are the best solutions to these problems? And why do you think that they've had to wait so long to come together to discuss them?
I'm not sure what the best solution to this problem would be (just like the rest of Europe), but because the economies are so bad such as in Greece Italy and Spain, I know that leaving them out to dry is not a good plan. Just like throwing a bunch of money at them isn't either. In the article it said that “It’s not possible to have a simple solution,” which is true, this will take years and years to resolve and it's going to take every member of the European Union's full support to do it. They need to do whatever they can in order to keep the Euro alive so all of the countries don't come tumbling down too.
ReplyDeleteHmm saving a country in crisis is not always an easy thing to do exactly. A good idea would be to look at what area's of the Greek economy is hit the hardest and work from there, for example if the biggest hit is in the tourism industry well then bring back the foreigners that come so they can spend money and the money gets "injected" into the economy thereby money gets passed around. Or maybe stop taking Euro loans and get people to once again invest in them give them a reason to if you dont no one will give you a chance. Thats what i think at least.
ReplyDeleteComing up with a solution to this problem is extremely difficult. I agree with what Tia said that just letting them sit while their economy disintegrates won't help anyone, but giving money to them won't either. Obviously something is wrong with their system and this is what caused their economic issues. So, if they are given money without established of fixing the problem(s) they will just fall into ruins again
ReplyDeleteMy question is.....weren't there some tell-tale signs that the economies of these countries were going sour BEFORE they completely failed?
ReplyDeleteI feel like there had to have been some indicators that were just ignored and the EU thought that the problems would work themselves out, but it would have been much easier to help their economies when they were beginning to slump down instead of when they were at the absolute trough.
And I really wish the EU luck with solving this problem and getting all of their members to work together and agree on the solution, because they're having a lot of trouble with that. Also I hope their solution doesn't involve asking China for money, as I've heard rumors of, because that just sounds like an even worse idea.
And I reiterate:
http://ru.memegenerator.net/cache/instances/400x/10/10595/10850074.jpg
@Teresa, please tell me that at least you understand that.
I really like what Hannah said about weren't there some signs before the whole economy collapsed? I think the worst thing Europe can do right now is to make more euros because than that will lead to MORE inflation, which is already a huge problem.
ReplyDeleteMany countries in Europe rely on tourism to support their economy and with economic problems world wide, there aren't that many people willing to travel. These countries need to evaluate their tourism situation and figure what is making money and what's not. Lower prices enough to still make a profit and cut out anything that's not making a profit. That's just a basic blueprint of one idea I think could help the European economy.