Economics Essay

In: Business and Management

Submitted By Fdewey
Words 672
Pages 3
Introductory Essay. I’m discussing “Prospects of the Eurozone” by Stephanie Balnkenburg, Lawrence King, Sue Konzelmann and Frank Wilkinson. In terms of a summary, the Journal suggests that general economic theory proposes that the European Union would benefit all memebers. That the crisis in 2010 was fisical in nature that it was the prolifery of governement spending in certain European nations that caused the crash; hence why the prospect of survival of the european union is being discussed in this journal. It discusses the belief of the ECB, that austerity measures are the only way that these indebted European nations are going to pay back what they owe and return to prosperity. The journal procedes to prescribe why this is incorrect using mainstream economic theory.
I disagree with the statement that all countries in the European Union have benefitted from joining. Spain with the availability of cheap credit built a ‘housing bubble’. Between 2004 and 2008 house prices rose by fourty percent not so co-incidently Spain adopted the euro in 2002. It wasn’t just lavish spending in the private sector, 17 regional Spanish Governments have large debts of their own, a sum of thirty-six billion is needed to refinance their debts in 2012. (BBC, 28 September 2012) The availability of euros (credit) meant along with private investors, local government could also be more frivilous. In contrast to the view that the euro hindered economic growth in Spain, gross domestic product (GDP) figures show the economic outcome of Spain differently. GDP rates in Spain between 1992 and 1998 were at an average increase of 2.26 percent per anum. Whist between 1999-2007 GDP was rising on average by 3.74, with Spain having adopted the euro in 2002. (Domingo Cavallo, 22 August 2011). The figures show a GDP increase average of 1.48 percent over the figures provided…...

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