THE WEAKER MEMBER STATES MAY HAVE TO LEAVE THE EUROZONE

The Eurozone, which has been faced with the most severe crisis since its establishment, would most probably succeed in staying intact for the time being; however, there is a possibility in a long term which cannot be ruled out that some of its weaker member states would have to leave it, announced Reuters. The collapse of the quotations for stock and shares reported last week in Greece, Spain and Portugal sustains the investors’ apprehensions that the severely indebted southern countries may not be able to deal with the membership budget and monetary requirements.

Many analyzers expect that the European Union or the International Monetary Fund (IMF) which claimed that it would help Greece, provided that Athens asked, will help the weak Eurozone member states somehow, if it is necessary, in order to secure the monetary union intactness.

Nevertheless, the national economy deficits are so big that even if the weak member states are rescued, their problems may affect the Eurozone growth for years to come. If the membership fee becomes too high in the following years, the countries may be forced to give up the euro. The southern Eurozone countries’ weakness during the first years was concealed due to the optimum international environment, the cheap credit loans and the building sector boom. The Eurozone membership shielded these countries from the most severe market challenges during the 2007-2009 financial crisis.

However, the ratio between the expenses and the advantages from the membership has changed during the last few months. The national debts and the unemployment rate have risen so drastically that the countries should attain remarkable economic growth in order to succeed in decreasing them. Because of the Eurozone membership they can neither lower their head interest rate, nor devaluate their currency.