The eurozone, officially called the euro area, is an economic and monetary union (EMU) of seventeen European Union (EU) member states that have adopted the euro (€) as their common currency and sole legal tender. The eurozone currently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. Most other EU states are obliged to join once they meet the criteria to do so. No state has left and there are no provisions to do so or to be expelled.
Monetary policy of the zone is the responsibility of the European Central Bank (ECB) which is governed by a president and a board of the heads of national central banks. The principal task of the ECB is to keep inflation under control. Though there is no common representation, governance or fiscal policy for the currency union, some co-operation does take place through the Euro Group, which makes political decisions regarding the eurozone and the euro. The Euro Group is composed of the finance ministers of eurozone states, however in emergencies, national leaders also form the Euro Group.
Since the late-2000s financial crisis, the eurozone has established and used provisions for granting emergency loans to member states in return for the enactment of economic reforms. The eurozone has also enacted some limited fiscal integration, for example in peer review of each other’s national budgets. The issue is highly political and in a state of flux as of 2011 in terms of what further provisions will be agreed for eurozone reform.
Protest in heavily indebted Greece. Image: ihned.cz
At the moment, heavily indebted Greece, simply speaking, is a bit like a person with 10 maxed out credit cards, selling all they own, which is far from enough, and gone to the bank to get a loan to pay for all this credit cards – it simply lasts a little longer but will snowball, the root of the problem is still the same – making credit on top of credit will only get them, and all neighbors in a similar situation, deeper in trouble.
How far can one print money, extend one’s loans, give one’s loans on top of expired loans to pay for the expired loan, sell and buy (move hands) of one’s expired loans and bounds in the market, and expect a sound return rather complete bankruptcy and default of its client ? Or of itself.
Who are the holders of the Greek public debt ?
For this and more, the Eurozone project is completely artificial, under-thought, market (banks) driven rather nation and people-driven; nothing much but an authoritative (people can not vote on Eurozone-related matters and affairs), apolitical-bankster-driven (most national credit is in the hands of foreign institutions – in the hypothetical example above, foreign banks and institutions, the seller/issuer of the mentioned 10 credit cards, who themselves most commonly borrow money off other foreign institutions to re-loan it to a third party on higher interests, and pay with back while making a sound margin of profit), mediocre project doomed from its very start.
The fact that it is authoritative (again, people can not vote on Eurozone-related matters and affairs), makes it clear that the people itself are down in the end of the line – whatever happens out of this Eurozone, it will fall hard in the people; and in them alone, as the Eurozone casino-like gamblers are busier at the moment trying to save themselves before the obvious happen, rather trying to save the whole of the snowballing situation as it stands.
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