Negotiations in the Euro Crises (main negotiations and decisions from Research Paper

Negotiations in the Euro Crises (main negotiations and decisions from the beginning until today) - Research Paper Example Countries such as Portugal, Ireland, Greece, and Spain popularly known as the PIGS enjoyed cheap credit in the international capital markets. Moreover, the EU supported these countries by offering structural funds. Additionally, the countries borrowed heavily from the international capital markets. Although investments increased in the PIGS, there was eventual increase in housing prices. Additionally, the economies became less competitive. Consequently, the countries experienced financial crisis resulting from excessive debts. This essay focuses on the negotiations in the Euro Crises and the decisions made from the beginning of the crisis until today. The 2007 financial crisis, which affected other regions of the world, resulted in collapse of the global financial markets. In 2009, the crisis intensified with the worsening of the Greece debt situation. The crisis spread to involve political as well as economic crisis in the entire Eurozone. This has threatened the permanence of the E uropean Union. The challenges facing the Eurozone include increased credits and public deficits in some of the Eurozone countries, the destabilized European banking system, economic downturn, and persistent imbalances in the trading systems in the Eurozone. Additionally, the employment declined gradually in most countries in the Eurozone, especially the PIGS. ... Following this crisis, several meetings, and discussions were held amongst politician, scholars, and businesspersons across the world and especially in the Eurozone. The discussion and meetings aimed at analyzing the crisis and ways to resolve it and prevent such occurrence in the future. The crisis started with deterioration of financial systems in some of the nation in the Euro zone. This resulted in bailouts for countries such as Greece, which was the first nation to receive aid from International Monetary fund and the European Union. This was followed by bailouts for other countries such as Ireland. Moreover, more countries especially the weaker economies in Eurozone have continued to demand for bailout. However, some countries such as Greece and Ireland are facing challenges related to European economic as well as the monetary union (Cooper Web; Bastasin 20-25). One of the major causes of the extension of the crisis is the lack of interest by most EU members on the decision-maki ng processes. Moreover, most economies made decisions based on assumption. Some assumed that the Greek bonds were similar to German bonds in terms of riskiness. The assumption was grounded on the fact that Greek and Germany have similar currency. The assumptions affected the participants in the bond market who failed to understand the difference in competitiveness and internal politic of the different Euro zone countries and effect of such factors on the economy. However, this has changed and negotiation within the Eurozone has resulted in establishment of different interest rate charges for the different countries in the Euro Zone (Nelson, Belkin and Mix 1-5). In June,