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The euro crisis

The dream and concept of unanimity in Europe is mired in shadows.

The news that economic growth in the Eurozone will soon come to a virtual standstill is quite disturbing. Such a pessimistic outlook could lead to another recessionary trend in the continent, which is already in the woods as far as recovery is concerned. The upheavals in Greece, Portugal, Italy and many of the central and Scandinavian countries have already unnerved the respective governments, who find it extremely difficult to walk a tightrope between austerity and spending, and this collective slump could prove to be the last nail in the coffin of euro’s glitter. Some serious policy-making exercise is the need of the hour as the economies of member states in the European Union have been reacting waywardly to the host of measures undertaken with the intent to streamline growth and productivity. This is why many of the countries have been at the brink of default and teetering to find a way out. It goes without saying at the same time that the international remedy on the part of financial donors hasn’t worked and rather led to lethargic tendencies.

Europe has no choice but to take a holistic look at the problems it is facing and come out with a join effort to address them. The piecemeal gestures haven’t worked and the daunting tasks of sovereign debts and market’s inability to respond to crisis cannot be left for another day. Though the recovery route could be slow and bumpy, the first step has to be taken instantly. The issue of huge economies bowing down to share the burden of smaller economies in the region has always been a political one to address, and the apathy in which the euro has landed is a case in point.

The way out is quite obvious: collectively member states have to cut back on their spending to reduce debt and also improve the macroeconomic indicators for registering growth. We have been here. Eurozone has to revisit the resolve that its leadership had made a year back, and that is to create a cushion fund for overcoming expediency calls and set up a micro-management mechanism through which debts and foreign trade could be monitored. In order to buoy growth, Europe has to beat stagnation at any cost. The finance ministers meeting in Poland cannot go back by merely offering requisitions for reforms. They have to see it implemented in letter and spirit.