What Is The Italian Eurocrisis And Why Is It Important?

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The Euro has caused many problems for not only Europe’s economy, but for the global economy. One currency shared among 19 odd nations was originally intended to make global trade easier, but from an economic standpoint it is a mess. There are extremely robust economies such as Germany, holding up the Euro while meager nations such as Greece, have been hurting it. The biggest problem with the Euro is that news from one nation can affect 18 others economies drastically. For example, Greece’s debt crisis a few years ago had a drastic effect on all of the Euro nations, and now issues in Italy are feared to potentially do the same. The Euro has caused many problems for not only Europe’s economy, but for the global economy. One currency shared among 19 odd nations was originally intended to make global trade easier, but from an economic standpoint it is a mess. There are extremely robust economies such as Germany, holding up the Euro while meager nations such as Greece, have been hurting it. The biggest problem with the Euro is that news from one nation can affect 18 others economies drastically. For example, Greece’s debt crisis a few years ago had a drastic effect on all of the Euro nations, and now issues in Italy are feared to potentially do the same.                                                                                                                                                                        The Euro was a poor idea from the start since Europe is a large place with many drastically different nations. Not every nation has the same economy, same unemployment rates, same economic goals, and same central bank. Due to this the Euro simply cannot be accommodating to every nation. The Euro made it far easier for nations to borrow money and Greece is the perfect example. After Greece joined in 2001, it borrowed billions of dollars from other European nations. Other nations were willing to do this because everyone had euros and benefitted from the influx. This meant European taxpayers were giving aid to nations which were not holding up their side of the bargain. This has caused many debates in Europe and has caused some nations to contemplate leaving the Euro.                                                                                     The fears around Italy stem from the potential switch to a new government which wishes to leave the Euro. Italy, being a major contributor to the Euro is necessary in order for it to succeed. As Europe’s fourth-largest economy, it is too large to ignore and if they were to depart from the Euro system, it would hurt the entire European economy. Therefore, this has caused a widespread scare regarding the value of the Euro. This should be monitored since political turbulence in Italy has the potential to affect the markets, but if Italy chooses to ditch the Euro it will take several months for things to be finalized and years for the Euro to be completely phased out of their economy.

About the author

Reid Monahan is a 17 year old from Concord, Massachusetts. He is a member of the St. Mark’s Class of 2019. He plans on pursuing a career in venture capital, software development and other investments. He intends on a major in economics and a minor in computer science. Some other interests include: squash, golf and computer science.

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