https://www.youtube.com/watch?v=8gqiyqu1GVE
This political cartoon was first published back in 2010 during the Greek financial crisis. Each pillar represents a country that had a financial issue inside of the EU. The first country to have issues was Greece and it became the worse off. After Greece, it appeared there was a domino effect as more and more countries in eurozone seemed to come forward and say they too were having issues. Greece was a catalyst as more countries like Spain, Italy, Portugal, and Ireland admitted they too were having issues. All of these pillars are holding up the euro representing the dependency of the euro on each of the member countries. One countries problems have a profound impact on holding up the euro. Each pillar needs to be stable or the entire system has a chance of falling down and crumbling. Meanwhile, the tourists on the side represent America and its Recovery from the 2008 recession. America is concerned about the impact this will have on the recovery efforts.
This relates directly to class. The BBC News article shows how this problem is still relevant today and just how interconnected the European Union is. This is related to globalization. One aspect of globalization is that with the linking of economies and growing inter-connections it creates linked problems. In class we discussed how the world financial crisis and recession that began in 2008 had a negative effect on Greece's economy. Along with many other factors include tax evasion, corruption, and autonomy that was given up to the European Union. Due to globalization and an increase in trade and interaction that is caused by globalization, issues in one country have spread to many. These countries are holding up the euro, this shows that when one country struggles the others have to come to the rescue of the whole euro will crumble. In the BBC article it debates what it would mean if Greece left the eurozone. I think if one country leaves the eurozone it will create some instability and the other countries will be forced to pick up the weight.
I think that the worlds economies are highly dependent on each other. The domino effect that the Greece financial crisis had on the European Union is a great example of this. I believe that this idea is especially regionally. For example the Mexican economy is dependent on the United States to be a marketplace for its various manufactured products and the United States depends on Mexico to make products its products cheaply so the average citizen in the US can afford them. When a major currency such as the Euro or the American dollar decline the effects are felt throughout the world.
ReplyDeleteWhat types of measures might be taken to alleviate these problems? Or is this just something intrinsic to globalization itself?
ReplyDeleteI think that the picture does not give adequate understanding to the issues related to the Euro. Yes, I concede that the euro was hurt when these countries were faltering, but it plummeted further because the other countries had to bail them out through austerity measures to make sure that the countries stay afloat. Without free control of the currency, these countries were at the mercy of the eurozone, which is a major weakness of a monetary union.
ReplyDeleteGlobalization spawned the creation of economic interdependence which lead to the creation of economic unions. Do you think the recent shifts away from economic reliance on other countries may cause the members of the eurozone to rethink their membership?
I think with interdependence and a shared currency there will be a problem of linked issues. Becoming more reliant on another country and being affected by them is a part of globalization. Perhaps better ways to monitor it need to be developed but I think problems like this are just associated with globalization.
ReplyDeleteI agree and think that the financial crisis in Greece and the faltering in the eurozone goes far beyond what this picture illustrates. I think many countries are probably rethinking their membership and the concept of economic interdependence because things were bad but if things were good they probably wouldn't feel this way. I think leaving the euro would be very complicated; for one it would challenge any real authority and legitimacy the EU had if members had the ability to just leave. Another issue is the cost it would take to transition from the euro back to a countries former currency. I think if countries begin to leave the eurozone, it will challenge any soft/hard power the EU holds in international politics. It will be interesting to see if a debate in the eurozone will arise over this issue.
While I agree with Tim that this picture really doesn't go far enough to explain the complexities of the issues related to the Euro, I think the intent was more to show how the eurozone and thus the Euro could be faltering due to the recent problems in Greece. I think the point was to show that when countries do not have independent control over their monetary policy, one country can bring the whole system crashing down. I think it does an excellent job of showing this point. I'm curious as to what you think about international currency and whether this example will slow the move to a standard currency across countries or whether this is just a minor hiccup and globalization in this sense will continue.
ReplyDelete