Abstract
This paper aims to highlight some important and significant incidents of the Eurozone Debt Crisis that occurred for the year 2013 and 2104. It also signifies the efforts of the concerned authorities in the similar timeline to curb the drastic effects of the of the debt crisis on the Eurozone as a whole. With more stringent regulations the authorities try to control and eliminate the ongoing debt crisis.
With a reduction in the investment worth billions and ever increasing stringent policies and control, the euro debt crisis is still nowhere near to its solution. Rather than curbing the debt crisis the new policies are resulting into more aggravated recession problems for the Eurozone. As per Eurozone, the Gross Domestic Product (GDP) for the 17-nation Eurozone dropped 0.6% in the last quarter of 2012, a much severe drop than the 0.4% economists had anticipated and the worst decline since 2009. It's the third continuous GDP deterioration for the Eurozone, confirming that this particular region is hindered in a recession that began with the 2008 financial crisis and has been intensified by the current Eurozone debt crisis.
In the beginning of 2013, the risk of a returning to national currencies had declined due to the exceptional measures taken to improve the monetary union (Glencross 2013). The observed reactions to the debt crisis were having varying economic and political consequences across the European Union (EU). By 2013, Greece, Ireland, Portugal, and Cyprus were in dire need of support from the fellow European members as these countries suffered the most severe blow of the debt crisis. This put the current leadership into question, raising numerous apprehensions regarding the policies put in place. The President of the Commission as well as the President of the European Council had numerous arguments during this course. However, there were these emergency loans for the above-mentioned regions by member states, supplemented by added amount from the IMF. The countries in the Eurozone had to sanction the agreement, which was applicable from 1 January 2013. In a discussion paper by Glencross (2013), it is mentioned that these countries have a huge motivation to essentially commence a national debt break instantly into law because from March 2013 loans sanctioned by ESM are conditional on a member countries, embracing the national debt brakes authorized by the Fiscal Compact. According to an article published by The Guardian, in initial three months of 2014 there was just an increase of 0.2% in the economic of the 18-nation Eurozone as a whole. The debt crisis was blamed for it as there was mild winters, which should has increased the economic activity. This figure would have been even smaller if it hasn’t been for the strong 0.8% expansion in Germany.
There were many new policies and new rules implemented by the concerned authorities to control the damage of the debt crisis and to eliminate this problem. In order to overcome the debt crisis, the Council and the European Parliament implemented a legislative approach on economic control (also called the "six-pack"), in the field of fiscal policy. It main aim was to intensify the existing Stability and Growth Pact (SGP). According to an article published by Eurozone (2014) in May 2013, a new reform of legislation (the two-pack) was introduced with two major objectives. The first and foremost was to increase the budgetary cooperation by hosting a mutual timeline for the euro members. It also allowed the European Commission to evaluate national budgetary strategies of each member states before they could be implemented. This new approach also entitled to economic and financial surveillance scrutinize the financial as well as economic activities and those member states that were going through a rough financial as well as economic patch would be monitored more stringently by the European Commission. In order to overcome the problems created by the European debt crisis, in June 2013, the European Council approved certain policies to increase youth employment rates under the banner of EU Youth Employment Initiative. According to Eurozone (2014) around €6 billion will be spent to promote jobs opportunities for young labor force, with most of the subsidy focused in 2014 and 2015. These funds will particularly focus on the areas with youth unemployment rates of above 25%. These supervisory structures will keep on ensuring harmonized economic and fiscal policy within the Eurozone.
Works Cited
Glencross, A. The EU Response to the Eurozone Crisis: Democratic Contestation and the New Fault Lines in European Integration. Europa-Kolleg Hamburg Institute for European Integration.
The eurozone is starting to recover. Now the new phase of its crisis begins. (2014, May 25). The Observer. Retrieved May 27, 2014, from http://www.theguardian.com/business/2014/may/25/eurozone-starting-recovery-second-phase-crisis
The EU's response to the crisis. (n.d.). - Eurozone. Retrieved May 27, 2014, from http://www.eurozone.europa.eu/euro-area/topics/the-eus-response-to-the-crisis/
