EU’s eurozone crisis as Merkel’s demands sparked ‘riots and political unrest’

Merkel criticises Germany’s state leaders on Covid approach

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The EU economy has been embroiled in a number of crises in recent years, with the coronavirus pandemic plunging the eurozone into turmoil. Delays in the vaccine rollout and surging cases in some European countries mean the EU could endure a slow economic recovery. Markets reacted badly to the prospect of tougher coronavirus curbs in France and Germany, sending the euro’s value tumbling to just 85p from 90p as recently as December last year. The currency slipped 0.2 per cent in London trading last week, meaning that it is down 2.3 percent on a monthly basis – its biggest drop since July 2019.

The coronavirus crisis represents the EU’s biggest economic challenge since the 2008 financial crash, when unity in the bloc was tested.

Greece, along with other southern European nations, was significantly impacted and required a bailout as a result.

Three bailout loans came in 2010, 2012, and 2015 from the International Monetary Fund, Eurogroup, and European Central Bank.

But before these support packages were agreed, Mrs Merkel made demands that sparked “riots and political unrest” – as highlighted in the 2016 documentary ‘Imperfect Union: The Eurozone in Crisis’.

She said that Greece and other recipient countries should adopt more fiscally responsible policies.

Matthew Bishop of The Economist told the programme that Mrs Merkel felt she had to make the demands to “keep the European dream alive”.

Ian Bremner of Eurasia Group added: “While everyone is telling the Germans, ‘Bail these guys out now’, the Germans are saying, ‘If we are going to bail them out, we are going to fix the political crisis’.

“And because a lot of the political leaders in these peripheral states don’t want to do that, because it’s painful, this crisis gets worse.”

The narrator highlights that due to the demands “riots and political unrest are now the norm in many European capitals.”

Matina Stevis, a reporter for the New York Times who grew up in Athens, highlighted how the Greek capital became like a “war zone” throughout the economic crisis.

She said: “I have personally experienced the change of mood in my hometown Athens… watching what was a welcoming, warm city turning angry, turning at times extremely violent.

“There were moments where it felt like a war zone. And that’s not just been in Athens.”

Zsolt Darvas, economist as Bruegel, highlighted that similar demonstrations took place in Spain and Italy.

He said: “If you look at southern Europe, if you look at Greece, there are demonstrations almost everyday.

“If you look at Spain and more recently Italy, there are more demonstrations on the street.”

Ms Stevis added that citizens felt “chronically, criminally misrepresented by their governments”.

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As for the coronavirus pandemic, Chief Economist at Resolution Foundation, Jack Leslie, also told earlier this month that the UK economy is set to enjoy a quicker recovery than the eurozone.

He said this recovery will be sharper because of the successful distribution of jabs, but also because the UK economy endured a deeper recession initially.

Mr Leslie said: “I think the starting point is that the UK economy has fared worse over the past year than most of Europe. Countries like Spain, Italy and France have also fared pretty badly.

“Most in Europe have had a better crisis, so there’s more scope for the UK to have strong growth in 2021 than Europe, so I would absolutely expect the UK to have stronger growth this year.

“The faster vaccine rollout will be a big deal, it has been a major success and will enable the UK to recover faster as well, but I think ultimately what a lot of the recovery is going to need is globally everyone getting back on their feet, it will be positive for the UK if Europe also has a strong recovery.”

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