Just when stability seemed closer than ever, last month saw alarming Eurozone statistics – for the first time since 2009, the Eurozone found itself in economic recession.
In December 2008, EU leaders agreed on a €200 billion stimulus plan to help boost European growth following the global financial crisis, which obviously impacted on Europe significantly. However, by November of 2009, investigations were being made in to debts of EU member states. It was revealed that Greece had fallen in to debt of €300 billion, 113% of it’s GDP.
From then on, Greece’s economy fell into a downward spiral, and eventually resulted in a €100 billion bailout package from the EU to rescue Greece. The economies of other indebted countries – Portugal, Ireland and Spain – were examined closely, and it was clear that the Eurozone was in crisis.
Since these investigations, countless budget austerity measures have been introduced across Europe, and with the help of these measures and the bailout packages from the European commission, the EU economy slowly but surely began rebuilding itself. In January this year, the Eurozone’s retail sales increased and it was reported by the Organisation for Economic Co-operation and Development (OECD) that ‘tentative signs of recovery’ were being seen within the region.
Throughout this crisis, the economies of both France and Germany had managed modest growth, but now their economies seem to be grinding to a halt. Despite being the strongest economies within the Eurozone, they cannot avoid being affected by the crumbling economies around them.
The policies of the Eurozone are aimed at reducing deficits and introduce reforms to mobilise the economies of the member states. However, European citizens feel that these aims are not being achieved, and the single currency is not providing them with a higher standard of living. This discontent has manifested itself in the form of protest and industrial action across the continent, which in turn provide ammunition for those who have contended the current policy from its outset.
All we can do now is hold tight and wait for the EU to make its next move, because this double dip has dragged down both the economies and the spirits of Europe.
Beth Thayne (EYPUK)