Why Should Euro Zone Remain Strong

The current dept crisis in euro zone have hit hard Europe in particular and world at large after the economic deflation of 2008. Not only it causes severe damage to growing economies of china and India but the great catastrophe hidden is the form of breading single euro-zone into part.

The world leaders are getting their heads together holding several meeting recently in duos, with the only one agenda. How to save Euro zone?

The question arises, why to have euro zone remain intact and is it benefit for Europe in particular and world at large. The possible reasons and benefit might be follows:


  • The Government are elected by people and are accountable to them. Therefore they take such political decision which may give short term gain and get public acceptance. But these are disasters in long term for country. But since no one can stop them are free to do such things.
  • In the euro zone, the member nations which are stronger economies and financier are able to pressurize and have expertise to pressure and have expertise to evaluate other nations governments steps and help them to get out of it. Such as in case of Greece and Italy, the more powerful countries like Germany and France step in and pressure them to stop taking harmful measures for economy but politically popular in chart euro zone work as watchdog for the nation in euro zone.
  • The Other concern in Europe is rising unemployment rates to record  level. The employment can be raised through increased demand and stable trade within and outside Europe. Nowadays the demand is greatly hampered by volatile fluctuation among nations of world. since euro zone has adopted single currency, the trade within Europe is quite stable and fluctuation are eliminated. Thy can bring healthy demand and trade and ultimately employment therefore euro zone should remain strong.
  • The Euro zone Companies compete strongly with china and India on cost. The economies of scale available to both nation is due to large population. The euro zone companies to gain such economies in future require large population of Europe which they can access without any trade or currency barriers poses by united euro zone.
  • The other benefit which is quite evident from the debt crises is that influence of one nation on other depends largely on economy rather than conventional military bases. Therefore the nations will structure their resources to build strong economy rather strong defense.

Just Like Japan did after world war II to become economic hub. Following the defeat in world War II which bring misery to life in japan for years to come it decided with support from us to focus on technology, education and non military economy. It did work and the people of japan forget the effects of war and become involved in progress of economy and technology. This give japan a base to build strong economy based on heavy industry and technology exports to other countries causing her position balance of payment and other countries and negative balance. In addition to that it has build big currency reserves to be able to finance other countries. Given that other countries dependance of Japanese goods and having economic aid the japan is able to influence other nations to minimize military threats from them through sanctions. In this sense economic European nations given that euro zone remain they not need to build military blocks but to have strong economy to influence other nations.

  • The other benefit from euro zone to member nation is that the consumer within euro zone have more more choices of goods and services with easily comparability in terms of value and cost since it uses single currency.Thus the bundles of currency conversion and then comparing them is eliminated.
  • The last but not least is the benefits of research and development project in case of health, Transportation, space, Technology which require huge funds which single nation cannot afford are the fruits of having euro zone.


Post Your Comment