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2012, vol. 64, iss. 3, pp. 60-74
European Union strategy for debt crisis resolution in eurozone countries
University of Business Academy in Novi Sad, Faculty of economics and engineering management, Serbia
Abstract
The European Union was established on 7 February 1992, with signing of the Treaty of Maastricht and the treaties under which the European Community, namely the former European Coal and Steel Community, and the European Atomic Energy Community were integrated. The idea of uniting Europe within a joint political and institutional framework is very old, and the elements of a political, administrative and cultural union can be traced back to the Roman Empire. After World War Two, political conditions were changed and the greatest number of West European countries definitely opted for democracy and the idea of fraternity and solidarity between nations. This created a possibility to implement the idea of integration and establishment of the European Union. On January 1, 1999, the European Monetary Union (EMU) introduced euro as the official currency, and thus the discontinuation of the existence of national currencies eliminated any risk in foreign exchange transactions within the European Union and brought great savings because national currencies were no longer converted. The European Union has a population of about 500 millions and 27 member states, among which only 17 use euro as national currency, and this community of countries is called eurozone. It is known that the economic development within the European Union is uneven, because on one side there is Germany, which had more than 2 trillion euros of trade with foreign countries in 2011, and on the other side there are Greece, Bulgaria, Romania, Spain, Portugal, Ireland, and Italy, which have extremely great debt problems in their respective countries. Lately, Germany with its allies offer certain solutions for the maintenance of the eurozone, which lead to the creation of the Alliance of European States, with greater powers of decision-making, as well as greater responsibilities of the member states. France suggests that Union bonds are issued within the eurozone, which would resolve the issue of debt crisis for a certain time. Germany disagrees with this suggestion, because it would cause a great loss to its economy. World economic crisis has lasted for years already, and most economic analysts relate its beginning with great purchase of real estates in the USA, because banks approved high-risk loans with low debt service capacity to persons who were not able afterwards to meet their debt service obligations.
References
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Gros, D., Steinherr, A. (2004) Economic transition in Central and Eastern Europe: Planting the seeds. London: Cambridge University Press
Samjeulson, P. (1970) Global Economic. New York: Jon Willey and Sons
 

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article language: Serbian
document type: unclassified
published in SCIndeks: 22/03/2013

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