Friday, December 30, 2011

What's behind the Euro Crisis?

What’s Behind the Euro Crisis and How Will It End?

While the pronouncement of the “euro crisis” has become a main topic in the newsrooms and while a plethora of pundits hasn’t got tired of predicting the end of the common European currency, the facts tell a different story. By the end of 2011 the euro was quoted higher than its long-term average since its inception and the official inflation rate of the euro zone has been kept under two percent. The average debt burden of the countries that make up the euro-zone is less than that of the United States or Japan. What is, then, the problem with the euro? Why doesn’t a day go by without a headline that says that the euro is doomed and that it would be only a matter of time until the European Monetary Union and the European Union, too, would blow apart?

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