Summary of the Article
The article “So, We Meet Again: The Greek Crisis” emphasizes the core issues that the European Union [EU] is considering in determining how to resolve the Greek financial crisis. According to the article, most citizens in the European Union are of the opinion that Greece should exit the EU (“The Greek crisis,” 2015). However, Greece intends to lobby for support from other EU countries in order to accept a 3-year bailout plan. The article depicts the challenges facing the Greece administration and the EU in reaching consensus on the most appropriate approach to the crisis.
One of the notable problems accentuated in the article relates to the lack of convergence between the political union and the monetary union in the EU. Greece is facing intensive political pressure from other EU member countries to exit the Euro Zone. However, Greeks are in support of the country’s continued stay in the EU. Besides, creditors have imposed harsh terms that Greece must comply with to receive the bailout. Additionally, Greece must undertake some fiscal restructurings like agreeing to fresh collective-bargaining rules and product-market reforms.
What the Article Means and Opinion on the Content
The article underscores the importance of effective interaction between the political and economic systems. Understanding the relationship between the two systems is fundamental to establishing a successful economic integration. In my opinion, the political pressure on Greece to undertake fiscal restructuring is essential in enhancing its access to a bailout by the EU. The restructuring will ensure that the money advanced as the bailout is utilized efficiently, hence stimulating the country’s economic recovery. Additionally, compliance with the terms outlined by creditors will ensure Greece’s continued to stay in the EU. Thus, Greece will continue to benefit from the benefits associated with the EU’s economic integration.
The issues outlined in the article depict the existence of a significant gap in the implementation of economic integration in the EU. The EU’s Economic and Monetary Union [EMU] is based on the Maastricht Treaty. The treaty advocates the establishment of a closer union amongst European citizens. The article illustrates a situation whereby most EU members are considering the exit of Greece from the monetary union. This situation might complicate the intended economic benefits of the EMU. Gerhard and Phillip (2014) assert that the success of the European Union depends on the establishment of deep integration at the political and policy level. The political pressure evident in the Greek crisis illustrates the existence of poor government policies amongst the EU member countries. Despite the view that the Independent European Central Bank [ECB] is required to monitor the economic environment in the EU, its effectiveness is hindered by political influence.
The EU countries have not empowered the ECB adequately. Subsequently, its ability to set and adjust the lending rate of interest and maintain consumer price stability is affected negatively. To ensure economic stability in the EU, all the member countries must adhere to the stipulated rules and policies. One of the aspects that governments should consider is the efficient management of public finances. The EU countries should consider adjusting the political and economic policies to foster a high level of economic integration. Moreover, regulatory agencies such as the ECB should implement strict measures to safeguard member countries from soaring debts. This approach will prevent the likelihood of a debt crisis in the future.
Gerhard, I., & Phillip, K. (2014). The European Central Bank as lender of last resort. DIW Economic Bulletin, 4(9), 16-28.
The Greek crisis: So we meet again. (2015). The Economist. Web.