Last week, the euro dropped to its lowest rate since last May, reaching 1.36 points against the dollar. The downfall of the euro has raised some concerns that the euro currency could break into what predated it—each country operating its own national currency.
The stability of the Eurozone, a bloc of 16 countries, has been threatened mainly by five economically troubled countries—Portugal, Italy, Ireland, Greece, and Spain—commonly known as the PIIGS, who are on the brink of defaulting on their debts. They are seen as the laggards, pulling down the value of the euro and putting more pressure on powerhouse economies such as Germany and France.
“The market is closely watching each country’s ability to pay its debts,” said Erkki Liikanen, a member of the European Central Bank (ECB) council, in an interview with Finnish TV MTV3. “If the faith is lost, rates will go up significantly.”
Greece is battling its huge debts with a proposal of “austerity measures” aimed at slashing its budget deficit by cutting costs in the public sector, reducing military spending, and stopping widespread tax evasion.
“Greece has taken an important step in the right direction,” said Juergen Start, a member of ECB executive board.
At the moment Greece, is suffering from a heavy budget deficit, which is more than 12 percent of its GDP. If successful, the austerity measures could save Greece up to 10.3 billion euros (US$14.08 billion) just this year alone and lower the deficit by 2.8 percent by 2012.
As a response to austerity measures, many Greek public workers and farmers took to the streets, protesting against any further pay cuts and loss of benefits.
Last week, Greek farmers blocked roads to neighboring Bulgaria in a heavy protest against the cuts in farmer support in the form of subsidizes.
“We’re retreating but we’re not backing down. We are going to wait and see if the government makes good on its promises,” Stathis Tsaprounis, a union worker representing farmers at a blockade in central Greece, told UPI.
Spain, with its 20 percent unemployment and heavily troubled economy, has also seen signs of political unrest. Spanish unions are set on staging a series of protests and have threatened to hold a veto of a no confidence in Parliament—aimed at toppling the government if successful.
The stability of the Eurozone, a bloc of 16 countries, has been threatened mainly by five economically troubled countries—Portugal, Italy, Ireland, Greece, and Spain—commonly known as the PIIGS, who are on the brink of defaulting on their debts. They are seen as the laggards, pulling down the value of the euro and putting more pressure on powerhouse economies such as Germany and France.
“The market is closely watching each country’s ability to pay its debts,” said Erkki Liikanen, a member of the European Central Bank (ECB) council, in an interview with Finnish TV MTV3. “If the faith is lost, rates will go up significantly.”
Greece is battling its huge debts with a proposal of “austerity measures” aimed at slashing its budget deficit by cutting costs in the public sector, reducing military spending, and stopping widespread tax evasion.
“Greece has taken an important step in the right direction,” said Juergen Start, a member of ECB executive board.
At the moment Greece, is suffering from a heavy budget deficit, which is more than 12 percent of its GDP. If successful, the austerity measures could save Greece up to 10.3 billion euros (US$14.08 billion) just this year alone and lower the deficit by 2.8 percent by 2012.
As a response to austerity measures, many Greek public workers and farmers took to the streets, protesting against any further pay cuts and loss of benefits.
Last week, Greek farmers blocked roads to neighboring Bulgaria in a heavy protest against the cuts in farmer support in the form of subsidizes.
“We’re retreating but we’re not backing down. We are going to wait and see if the government makes good on its promises,” Stathis Tsaprounis, a union worker representing farmers at a blockade in central Greece, told UPI.
Spain, with its 20 percent unemployment and heavily troubled economy, has also seen signs of political unrest. Spanish unions are set on staging a series of protests and have threatened to hold a veto of a no confidence in Parliament—aimed at toppling the government if successful.
