The Eurozone Crisis | European Debt Crisis

Running Head: EUROPEAN DEBT CRISIS
EUROPEAN DEBT CRISIS
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EUROPEAN DEBT CRISIS1
Introduction
The Eurozone crisis took place in the European Union in the end of year 2009 at the
starting of year 2010. This crisis has a significant impact on the economic and labour market
of the countries like Greece and Spain and the entire European Union region. The role of
Germany and Greek in the European Union is discussed in this paper.
Discussions
The Eurozone crisis was raised due to high level of lending and borrowing practices
in the country. The use of fiscal policy and the various approaches used to bail out the debts
have troubled various bondholders and the banking sectors of the country. The countries of
Europe face debt burden and was unable to pay back the debt to the bondholders. The debt
money were collected from investors, bondholders and borrowers (Frieden & Walter 2017).
There were huge capital loss. Greeks was a country that has collected a huge sum of money
by collecting more tax. It also political affect in the country. Hence, the main cause of
economic crisis is liquidation in banking sectors, weak growth of the economy and more
liabilities. Greek economy was still a growing economy in the European zone. The country
had invested a huge sum in the heavy industries in order to sustain their economy. Hence,
more investment has increased the debt of the country. Germany as a country of Europe
Union has most important industrial sectors related to health, social activities, defense and
public administration. Germany provides money to the European budget that helps the Union
to fund various projects related to building of roads, money supported for researchers and
preventing the environment. Both the countries; Greece and Germany helps the European
Union to provide security and cooperation in the economic sectors of the continent. But, both
the countries are not equally benefited from the union (Stockhammer & Kohler 2019).
Because, it is important for Greece to stay within the Eurozone. If Greece moves away then