Post #1: What did you do this summer and how can what you did this summer be connected to an important issue?
This summer I was suprised by my parents taking me on a two week vacation to Paris, France. Picture this waking around beautiful France, and admirring the scenery and suddently you notice beyond the landscape, you recognize the people begging for money, hopeless and destitute. This is just the beginning of my trip where evdience of the European economic crisis was evident. France has undergone a huge economic down fall this past 2011 year. They have been contributing to the Greece default that recently happened, and because of the contribution they are losing their economic balance. With the European debt crisis, france has had much problems with stock exchange in Paris fearing that France’s own sterling credit rating could be cut. French banks are being loaded up on the debt of both Italy and Greece, and other European countries that are facing debt problems.
I also was given the chance to travel to another part of Europe where the poverty was less noticeable. It must have been quite interesting to be in France over this time as they had recently had some scandals pass over as Dominique Strauss-Khan (the French President of the IMF)had recently stepped down from his position on the IMF. I really wonder if this caused even more turmoil in Europe's already economically unsettled territory. While I was in Italy, I remember hearing that France was supporting Greece economically and was helping to get it back on track which is odd as they have so many problems themselves. Also, their inefficiencies boggle my mind as they have a ridiculous number of absolutely pointless committees that meet maybe once every two or three years which are still funded nonetheless. I really like your blog as you related it to the other economic crises in Europe! Great job :D
ReplyDeleteI didn't get a chance to travel any place in Europe this summer but when I went to Florida for a month I saw many people living on the streets and sitting outside stores begging for money because of their economic situation. It opened my eyes on how fortunate I am that I am not as badly affected as some families, it truly breaks my heart and I want to help everyone, how do think these people could be helped?
ReplyDeleteI didn't have a chance to travel anywhere over the summer, but I did know about the poverty throughout Europe. It is very good that you noticed, and/ or even taken the time to notice the poverty running throughout Europe.
ReplyDeleteWhen one thinks of France you’re right they usually think of all its glory and not so much its shortcomings. While the European Union helps otherwise small countries to achieve representation on a world scale, I believe that right now we are witnessing the downside to a united Europe. While when all the countries in the EU are pulling their weight it is a giant plus to be united, however when many countries are failing economically they can pull other countries down with them. A perfect example is France. France invested large amounts of money in Greek banks and now they are suffering because these banks have gone bankrupt.
ReplyDeleteEconomics is something I’m very interested in so I did a bit of background research into the economies of both Greece and France. In Greece’s case its economic problems stem from socio-economic reasons. The people of Greece expected benefits typical of a more left wing government but didn’t want to pay the taxes necessary to fund them. This led to a huge deficit in their economy. Once there was a large deficit the government did what most governments would do in this situation: sell treasury bonds and treasury bills. What better people to sell these bonds and bills to then the other members of the European Union such as France and Germany. One thing to understand is that because of corruption in the Greek government the countries purchasing the bonds were not fully aware of the economic condition of Greece because it was being covered up by corrupt members of the government. All of this in conjunction with the fact that Greece’s economy has a relatively small industrial sector (about 17%) and a huge service sector (about 76%) so they aren’t as sustainable as a country like France, results in the possibility of defaults on the bonds and bills issued to France. A possible solution to this problem would be the severance of Greece from the European Union when they would return to using the Drachma as their primary form of currency.
France was able to avoid the brunt of the recession due to their diverse economy. Unlike Greece which has mainly primary and tertiary industries, France has a large secondary industry which provided it with economic stability throughout the recession. One of the only reasons France has economic problems today is like Nour said because of money invested in the failing economies of countries like Greece and Italy. If Greece were to default on the bonds and bills issued to them by France then France would not only cease to collect interest but they would lose their initial investment. This would be detrimental to the French economy and is a perfect example of the main shortcoming of the EU which is weaker countries pulling strong ones down. In addition if Greece defaults then they will still be in debt and require aid. This is a vicious circle that can be stopped by the removal of Greece from the European Union.