Who’s To Blame?
Some say the blame should fall on the reckless borrowers, i.e. countries who decided to take advantage of the low interest rates and borrowed way too much. But you can’t accuse all the indebted governments, because all of them didn’t engage in irresponsible borrowing. Some believe that the problem lies in the Euro itself. The whole idea of having a single currency for 17 economies was messed up right from the beginning. Usually, a country’s central bank handles the demand and supply in the country. It can control the flow of money in the country to encourage economic growth. However, this wasn’t available to the countries in the Eurozone.
If the common currency didn’t exist, the reckless borrowers wouldn’t have gone overboard borrowing at a low rate of interest. If Greece wasn’t a part of the Eurozone, they wouldn’t have borrowed more, which worsened their plight. They would have figured out a way to get out of their debt, but the joining the euro they only increased their difficulties.
There are multiple reasons leading to the great European debt crisis, mostly finance related. It’s essential to follow the progress of these countries because their financial health will have a domino effect on global banking and trade markets.
