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CRASH TIME for
EURO’S FUTURE
Alina Artemieva, 887
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One of the most
powerful currencies
in the world
is well-intentioned
but failed
experiment?!
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The euro is the sole currency of
 24 countries
 329 million people
Countries use euro as the
official currency.
Countries are in the European
Union but retain their currencies.
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It was declared in 1999
unit labor costs
unemployment rates
productivity
government debt
The adoption of
the euro would
narrow the economic
differences in
fiscal deficits
income per capita
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However, common currency…
increased
divergence of
economies
complicating
factor for
European
Central
Bank
“one size
fits none”
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Greece’s sovereign debt crisis can have
an impact on all countries of euro zone
The adoption
of the euro
helped to ease
trade
veiled defects
in the euro
treaty
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Why wasn't Greece fitting for the euro
currency?
missed the wave of globalization
GREECE
developing
country
different
economy
high level
of
borrowing
cost
mishandle
cheap
financing
benefits,
tax
evasion
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subpar growth
fail to develop
key industries
Greece’s
economic
difficulties in
the future
huge debt load
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The cost
of imported
products
would raise
Prices
for exports
would be
reduced
devalue
local
currency
If Greece still had its own
national currency,
it could…
Greek GDP
would rise
The
unemploymen
t
rate would
decline
Social welfare
costs would
be reduced
Tax revenues
would
improve
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Instead, as the price for receiving a bailout from
the International Monetary Fund
The Greek
government
is being
forced
to cut
salaries
and pensions
Its goverment
is being
obliged
to raise
taxes
prolonged
recession
and the
economic
pain
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Germany’s benefits from the euro
+
German
exports
became
cheaper
+
German
companies
were forced
to lower
labor costs
+
German firms
became even
more
competitive
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 In a survey 57% of respondents agreed with
the statement that Germany would have
been better off keeping the mark than
introducing the euro.
 Many analytics convinced that Germany
should stay in the euro zone for Europe's
and its own sake.
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Any
splintering
of the euro
A crisis of
confidence
in Europe
The
demand
would
plunge
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Pascal Petito offered 3 possible outcomes
of tackling the situation
Europe would
reorganize its
institutions and
allow for more
fiscal unity
Three
possible
scenarios
The euro would
disintegrate
Europe will just
muddle through
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Germany and France have chosen the
most optimistic scenario
a program of increased
coordination in tax, social
policy, and debt limits
strict budget rules
greater harmonization of
economic policy
radical reforms
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“Pact for competitiveness" aims to
harmonize
corporate
taxes
wage
bargaining
educational
qualifications
pension
systems
Areas of national
economic and
social policy for the
euro zone countries
public
debt
limits
management
regimes for
troubled
banks
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 "The euro is more than just a currency. A united
Europe is the guarantor for our peace and our
freedom. Germany needs Europe and our common
currency, for our own good, and for coping with
global challenges,“ German Chancellor Angela
Merkel said in her televised address to the nation
marking the start of the New Year.
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