Europe: debt crisis is over?

- French President, Francois Hollande, said recently that the debt crisis which makes it difficult for the region in the past four years, has now ended. That would be good news for the world when the data are not against that comment.

                                                 French President Francois Hollande

During a visit to Japan last week, the French president has confirmed for the Japanese business leaders that the crisis in Europe has gone through.


 Sarkozy says debt crisis has served to promote more cohesive Europe and move forward in the most efficient way. Mr Holland believes that the crisis, which weakened the euro area, has strengthened its internal strength. According to the President of France, the euro zone now has all the tools of stability and unity. There has been an improvement in the economic management of the euro area as a coalition established banks, building regulations on budget issues Eurozone allow better coordination and a the power of convergence.

Long time past, European countries have high unemployment and economic recession raging, obsession. Most recently, in January 4/2013, there were concerns about the future of the euro is worse than the bailout for Cyprus. This small country of the euro zone has secured a loan package worth 10 billion euros (13 billion dollars) from the partner countries of the European Union and the International Monetary Fund.

At first, a proposal of solutions to address the situation by raising money through taxation on all payments (including organizations and foreign individuals) at banks caused panic Cyprus chaos in international financial markets and was quickly withdrawn. Instead, this island nation has agreed to 13 billion euros through a tax on the money sent through large banking reform. This came after the Greek bailout - twice - as well as Ireland, Portugal, and a bank bailout of Spain.

The unemployment rate in the eurozone at a record high - with 19.38 million people lost jobs. And this block is in the longest recession since being founded in 1999, is currently in the period of six consecutive quarterly decline. Even France has this month the unemployment rate rose to its highest level in 15 years. Recently, the European Commission and the International Monetary Fund urged France needed given the economic reforms would otherwise risk falling behind several neighboring countries in Europe. French President committed to promoting employment and housing growth, but domestic demand has been dampened by the eurozone crisis.

The immediate challenges for the euro area is very large and no one in the world dare to believe that the region's debt crisis in Europe had ended.


Regarding the budget deficit, the EU regulation states that use the euro are not allowed to have an annual deficit of more than 3% of GDP, but some countries have failed to comply with the rules of the Year recently. Notably, German, Italian and French were among the first countries to break the Maastricht rules over the past decade, while Spain and the Republic of Ireland to spend surplus before the crisis in 2008 broke out. Since 2008, the peripheral economies like Spain, Greece and Portugal have larger deficit, because slow economic growth, generate tax revenues and require much less support payments unemployment. Ireland has experienced particularly large deficit, to 31% of GDP in 2010, mainly due to the cost of the bank bailout.

Notably, a number of euro zone member has never met the requirements of the Maastricht Treaty debt must not exceed 60% of GDP.

In fact, the request is dropped at the time of 1999 to ensure that Germany would qualify, as well as allowing the Italian government, which has been heavily involved debt this process. Greece hid a lot of debt before the financial crisis, and since 2008 the government has made efforts to those of its excessive spending under control.

Such an analysis to show that the difficulties ahead for the euro area is very large and no one in the world dare to believe that the region's debt crisis in Europe has ended whether the French president declared crisis European debt is over with. 81% readers of The Economist magazine said that the debt crisis is still ongoing, only 19% agreed that everything was over. Only the austerity measures, increasing labor productivity and encourage new exports helped Europe ... for sustainable development in the coming years.