The European Union Economy is one of political geography’s most unique institutions, representing the economic benefits and downfalls of supranationalist ties. The EU, which consists of 28 nations and includes some of the world’s largest economic powerhouses, binds nations that meet economic, political, and cultural standards with one central factor; the Euro. Several other positive benefits, such as more fluid borders and marked stability, flourish under this organization, but at its inception, economic stability was a main selling point. Now, it seems more of curse than a blessing.
The European Union was established in 1957 in lieu of World War II, and the horrendous, prolonged depression it struck across Europe. As the Treaty of Versaille, which “settled” World War I, had forced Germany and other perpetrators of the conflict to suffer unprecedented economic depletion, thus creating a power vacuum for the likes of the Third Reich, the world agreed that collaboration, rather than isolation, was the key to maintaining peace in postbellum society. In 1991, when the Euro was first introduced, the prospect of a currency to unify a variety of economies was, although by no means revolutionary, extremely promising. However, there needed to be guidelines in place to ensure no weak economic standings deteriorated the entire platform for all participating nations, so a maximum debt, standard GDP, and growth rate were deemed necessary for membership.
Now, after what scholars have coined the “Great Recession”, the shortcomings of this establishment are more apparent than ever. Greece is the primary instigator of this conflict. Joining the EU in 1981, it has since been revealed that this quasi-socialist nation fibbed on and tweaked its numbers a bit- their debt to GNP ratio was not Eurozone satisfactory. This in mind, 2008 came rolling around, and the Greeks were drowning in their deficit, and dragging the whole lot of Euro nations with them.
This can be understood with simple economic principles; money circulates, from me to goods and services, and from goods and services back to you until it inadvertently reaches me again. When macro economies such as Germany’s and Italy’s tied to so closely to the Grecian one, spending and earning is fluid between borders, so any money made boost their common currency, and any money lost affects everyone negatively. Thus, Greece’s debt is everyone’s debt, because as they spent more and more of the Euro, the lack of tangible funds circulated throughout the continent. The deficit increased, and now the European Union currency is facing an almost all-time low.
There are two sides to this conflict; that of the supranationalist organization suffering due to one economy’s incompetence, and the vulnerable state searching for security. It is without doubt that national economies have not been the most stable since Greece’s deficit got out of whack, and the workforces of Spain and Italy have been hit hard by the carelessness of Greek officials. As a wildly successful feat of political theory, the European Union has every right, really, to be furious with Greece, and in all reality could have expelled them from the organization. Official reports were manipulated to win every state’s vote, a conniving trick that has no wiggle room for tolerance. After all, tax fraud is punishable by life in prison here in the United States. However, what was Greece to do? The requirements to enter the Union obviously favored larger economies, the historically more stable and successful governments. As a sporadic and highly disorganized state, of course they dreamed of being accepted by the European Union. While it’s not acceptable to lie about financial history, you have to agree that, perhaps, the rules could have been bent for Greece, as long as a detailed plan to place them back on the right track was provided and followed through with.
The solution to this conflict is not easy. The media has perpetuated two common end results; either Greece defaults on its debt, or it hangs up the European Union member-state coat on the rack. However, with the newly elected leftist prime minister of Greece, Alexis Tsipras, has ideas of his own. He plans on increasing employment infrastructure and padding up welfare programs to fight unemployment and speed up their race to diminish their faulty history and its phantoms. In the future, the European Union can ensure to investigate the financial-standing of prospective members more closely, maybe even setting up a trial period of a few years before full initiation is permitted.