Readers Question: Should Greece pull out of the euro ? They are in the fifth year of recession despite EU bailouts – it seems like pouring money down a black hole. Yes. I believe they should leave the Euro. I put some arguments for and against here – Should Greece leave the Euro. Leaving the …
The election of Francois Holland as French president is important for changing the dynamics of the EU. There is currently a strong acceptance of the need for continued austerity and fiscal targets. However, under the weight of soaring unemployment, European voters are becoming increasingly disenchanted with this recipe for low growth and high unemployment. But, …
One of the great challenges facing Europe is the persistence and increase in levels of unemployment. The highest rates of youth unemployment are in Spain (51%) and Greece (51%). Other countries include Italy 35%, France 21%, UK 21%, Portugal 36% Youth Unemployment in the UK This shows how youth unemployment in UK has increased since …
Since coming to power, the Conservatives have made reducing the UK’s record peace time deficit a high priority. It has been argued that drastic action was necessary to avoid the UK’s debt becoming unmanageable. David Cameron argues without rapid spending cuts, the UK could be facing rising interest rates and the prospect of debt default, …
Is this the future of a world without oil? Readers Question: What would a world without oil look like? Oil is currently the most important commodity. It is vital to transport (air, sea, road and rail) and also the production of goods like tar and plastic. Without oil, society and the economy would look quite …
Readers Question: Why is the current recession in Europe so bad? The recession in the Eurozone is one of the deepest recessions on record. For example, Greece are expecting 2013 to be the sixth consecutive year in recession (with on and off quarters of recovery)- this is one of the longest recession on record. Output …
Readers Question: Does low inflation always mean low-interest rates? Generally low inflation will lead to low-interest rates. Although in practice there may be some divergence. The UK has an inflation target of CPI = 2%. Therefore, interest rates are used to achieve this target. If inflation falls to below 2% the MPC will cut rates …
Most European countries have embarked on a range of austerity measures designed to reduce their budget deficits. Why have austerity measures been pursued with great vigour in Europe? What is impact of austerity measures on economic activity? Why Austerity? Pressure from Bond Markets. Investors have become nervous about holding debt in several Euro-zone countries. This …