European identity, meaning unification or integration of Europe, is associated with the European Union (EU). The EU includes 28 member countries, more than half the European countries have already joined the EU for years and thus the EU unifies Europe. The Eurozone crisis is an ongoing crisis that has been affecting the countries of the Eurozone since early 2009, when a group of 10 central and eastern European banks asked for a bailout. Consequently. The crisis has made it extremely difficult for countries such as Greece to refinance their government debt without the aid of third party such as the European Central Bank (ECB) or the International Monetary Fund. Many may argue that the Eurozone crisis is over. In fact if the Eurozone crisis
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The ECB have taken measures to prevent a similar issue by monitoring liquidity across Europe to prevent asset bubbles or stimulated inflation. The Eurozone crisis is far from over as growth across Europe is still stagnant. This is complex as loan repayments can only be repaid through real GDP growth. Growth in this case cannot simply be derived from austerity measures or the cut back on spending, which potentially leads to a rise in unemployment.
A variety of business cycles exist inside the Eurozone. Germany is strong in the financial industries and is vulnerable to international financial shocks whereas Spain is much more concentrated in the tourism industry where increases in wages, the value of currency or even bad weather patterns gave an effect on their balance sheets.
The opposite may also be argued, that the European crisis is over and growth has resumed. Even though growth has resumed, real GDP in countries are still facing with a low or negative growth, when taking into account inflation. Figure 4 illustrate that Italy and Greece are still facing negative growth whereas Germany and UK are barely grasping for growth. More the less, growth hasn’t resumed to its potential level where countries in the Eurozone can start repaying its debt. The Eurozone hold a single currency, the Euro (€).
Some of the reasons are due to lack of international competiveness to trade