In 2012, Greece remained in the middle of a financial obligation crisis, and financial instability was infecting other parts of the euro zone. The European Central Bank’s then-president Mario Draghi offered a speech that is now credited with conserving the euro. A years on, the euro and the euro zone are still undamaged. But among the core problems at the heart of the crisis still stays. In truth, it raises its head whenever the area comes under financial pressure.
In July 2012, the European Central Bank’s then-president Mario Draghi offered a speech that is now credited with conserving the euro. “The ECB is ready to do whatever it takes to preserve the euro, and believe me, it will be enough,” he stated at that time.
Greece remained in the middle of a financial obligation crisis, and financial instability was infecting other parts of the euro zone. The ECB, the reserve bank for the nations that have actually embraced the euro, needed to act.
Ten years later on, the euro and the euro zone are still undamaged. But among the core problems at the heart of the crisis still stays. In truth, it raises its head whenever the area comes under financial pressure.
The essence of the issue in the euro zone is this, according to Angel Ubide from the Peterson Institute for International Economics: “Two identical firms or households have differing financial conditions or funding conditions, just as a result of the country they are located in. So, in that sense, your passport becomes a major determinant of your funding conditions.”
“Of course, there should be differences, but when the differences are very big, and then we can say that monetary policy has been fragmented,” he included.
So, is the euro zone at danger of disintegrating? Watch the video to learn more.
