Euro Crisis

Agbonson, Aku-sika Elikplim
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Since 2009, starting with the Greece crisis, the Euro area has been facing a crisis of public finances originating from the subprime crisis that began in the United States. The subprime alone is not the main causes of the crisis though but we could not talk about the crisis without mentioning it, for it is the detonator. The crisis emanate from the combination of factors such as the transfer of private debt (eg. household credit default debt on banks) on public debt (mainly due to states commitment to save their financial system from bankruptcy), falling of tax revenues due to rising unemployment and increasing of public spending (Notre Europe, Policy Bref, 2011). Another cause is the European Economic and Monetary Union (EMU) failure to put automatic sanctions measure in place and help every country adapt their economy to the new currency by enforcing competitiveness. Highlighting on one hand the gaps between coordination and surveillance of the economy policy and on the other hand the interdependence of the countries under the same currency, help shine a light of the short come of the EMU treaty. Of the many affected countries faced with the crisis our will first of all focus on those called The PIGS (Ramon Marimon, 2011), namely Portugal, Ireland, Greece, Spain, to see how they entered into recession and how they are being help by both the euro zone and the European Union as a whole, before going further to see future measures taken to prevent crisis in the future.