This is a great interview with a Member of European Parliament talking about the European Union breaking up and the huge problem the PIIGS (Portugal, Ireland, Italy, Greece and Spain) are having.
A little background on what exactly the European Union and the EURO is. It is a group of European countries that decided to throw away their independent currencies for a unified single currency which it’s value was based on the performance of all the countries as a whole. To maintain the stability of the currency, they had to maintain the stability of all the countries that were within that union. Similar to what Canada does with its provinces, the higher producing countries in the union would support the weaker countries by sharing their wealth.
Although that has worked for several years, Greece and other weaker countries have reached a point in which they can no longer sustain their cost of living to match the “average” interest rates, and value of the EURO currency. So Greece for instance, has managed their country and it’s spending extremely bad, which would typically result in their local currency to become devalued. The problem is… they no longer have a local currency… they belong to the EURO. So since they can’t devalue the currency to reflect their indebtness… they have to resort to major cutbacks. Meaning major unemployment, cut backs in health care, education etc.
What could have easily have been resolved if they had their own currency, is now turning into a nightmare for the country. And this exact same thing is starting to happen to the rest of the PIIGS… which will ultimately result in the end of the EURO as currency and UNION.
– Michael Kirlew, Mastermind Growth
No related posts.
