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European Debt Crisis

After World War II, the European states built a system called the European Welfare State aiming to share prosperity with each other to prevent further conflict by keeping everyone contented. This meant a steady provision of welfare services provided by the state, wherein the state assumes the comprehensive responsibility of each citizen as a matter of right. With this safety-net, European citizens can enjoy, six weeks vacation a year, retirement at 60, monetary benefits for conceiving a child and cheap but quality education. Life is good for every European which they enjoyed for decades, yet all this good-life comes under threat because of Europe’s sovereign debt crisis.

The sovereign debt crisis is seen as originating from Greece, wherein there is a concern about the rising cost of government financial debt. Greece crisis threatens to pull the economic growth of the European Union, since its economy is seen as part of the performance of the whole of EU. It had been reported that the government of Greece, contrary to monetary union guidelines, “has been found to have consistently and deliberately misreported the country’s official economic statistics. In the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001 for arranging transactions that hid the actual level of borrowing.” This enabled the Greek government to overspend more than what they can pay back and hiding their deficits from the union.

This made several trading and commodity devaluate forcing several member country of the European Union to make tax cuts and reduce the welfare they are giving to their citizens. The crisis cannot come at a much better time for the Europeans who are just reeling from the major economic crisis, several conflicts involving European States and the large scale immigrations of Europeans. Once the continent had been seen as one of the most luxurious and profitable place to stay, now, this luxury is seen as a silent plague that threatens to kill the livelihood of its citizens.

Each year, governments of each European country experienced slow plunge in their GDP, forcing legislators and governments to reduce the benefits they are giving to their citizens. And because of this, the citizens are becoming more discontented, choosing to live somewhere else. The once strong union is faltering because of the slowly weakening support of its people who had been used to living in luxury and unwavering support from their respected countries.

Change seemed to be the idea for the day and a solution for the crisis. But will this be for short-term or long-term effect? As of the moment, every change hurts the life of every European, and the more the change, the more discontentment will be created. Each country in Europe cannot undermine this potential threat since without the support of the people, the economy will crumble. One thing is for certain, Greece must be fixed, or else, every European state will be dragged down with them.

May 28, 2010 - Posted by FreeBreakingNews.org | Ecomonics | European Debt Crisis, europena states, welfare state, world war II