The Euro zone is an organization that consists of representatives from a great deal of European countries. Each of the countries in the Euro Zone such as Italy, Germany, France, Greece, and Spain all share a common currency called the “Euro”. The central bank that manages all these countries is called the European Central Bank (ECB). The complexity of the ECB’s task of managing a stable economy is incredible.
The Euro Currency Symbol
The European economy has been in trouble for some time now. This partly has to do with policy decisions in countries such as Italy, France, Spain and Portugal, where government debt has grown too high. The Euro zone has been in recession three times in the past six years and is in danger of doing so again because of slow growth and low inflation.
The struggle for a solution has run into some problems however with Germany and the ECB disagreeing of what the appropriate plan of action should be. Essentially, Germany wants countries to decrease their debts and the ECB wants countries to spend more in an effort to stimulate business.
There are obviously economic downsides to both plans however I believe that the Euro Zone should stick to Germany’s plan. Countries with such high levels of debt need to get it under control so they can provide for their people, get better credit ratings, and just generally be in a more stable position.
Extra reading on the situation: http://www.theglobeandmail.com/report-on-business/international-business/european-business/germany-ecb-policy-standoff-over-economy-worries-markets/article21152134/
Image: http://img.freepik.com/free-photo/euro-currency-symbol_318-41919.png?size=318&ext=png