Five years after the crisis – is Europe rescued?
Five years after the crisis – is Europe rescued? Is the crisis over? Which are the current risks for our economy?
The crisis in 2007 was a shock for Europe. The election in May is not just about the members of the European Parliament, it is also about the way we will deal with the financial problems caused by the recession since 2007.
Mainly there are two different ways to solve the crisis: to have more or less Europe, to work more or less together or to increase or decrease cooperation. In May, every eligible citizen will be given the chance to vote. Please go, vote and use this chance!
The main problem currently is to refinance the government debit. Banks charge a high amount to lend money to Greece, Ireland and other countries which are heavily affected by the crisis. The European Commission, the European Central Bank and the International Monetary Found established a task called “Troika” to rescue European countries and their banks. They do it in two main ways: First of all they help to keep the countries fluid so that they can pay their bills and payments. To make political and economic reform is the second task. The idea is to reduce the political influences in the economy of these countries.
Another strategy to help less wealthy members of the EU to refinance themselves in future is to have “Eurobonds”, which are common debits. Socialdemocratic parties in particular emphasize this way because it would mean that the interest rate for states like Greece or Italy would decline. This is because every member of the EU would be responsibile for a possible bail out. We would be liable for the debts of our neighbors and in particular the German interest rate would increase significantly.
High interest rates have got one very important function: to discipline the current government not to spend too much money and not to exaggerate investments. If an administration has high debits and increases its debits further, the interest rate will also rise because of the risk increase.
Moreover the youth unemployment is dangerously high. How can we convince young people of democracy and the advantages of the European integration if they have no perspective for the future? If there are jobless and unemployed even though they have a high education? Europe needs to increase the amount of jobs for young people especially in manufacturing, production and researching.
