Currently, the Euro is facing many structural defects that are badly affecting the European economy. The major problem is that European authorities always put in place measures that instead of dealing with the crisis it pushes away, thus, time and again the problems always tend to come back again. This vicious circle never ends and always look like they are moving from one crisis to another. In the business economics circle, this practice is known as kicking the bucket down hill.
Europe knows as nearly six crisis to battle with the latest being the world crisis brought by the economic shifts in China. Apart from that, the Euro is under fire, especially now that Britain is trying to pull out of the European Union through a referendum. The economy of Greece has already fail, and the union was forced to right off its debts and in addition, donate money to save the country. With two members of the union unstable, the union is not strong enough. The number of illegal immigrants crossing over to Europe is also increasing day in day out, and they are stretching out the unions resources. Another problem is internal conflicts, as in the case of the Russian aggression against Ukraine. These crises seem to compliment one another to try and bring down the economy of Europe.
China seems to be a thorn to the world economy at the moment. The shift of its economic growth model has by far many uncontrollable impacts on other economies in the world. Europe is not the only one suffering from this; many third world countries are on the facing a rise in their interest rates due to Chinas move. Even China itself is suffering, the yuan is devaluing every day as time passes. Asian stocks exchange markets were forced to close down trade in Chinese stocks for a day in the first week of the year. By the next day, a total of $2.5 trillion had been lost from the market due to this closure. American stock markets are also caught in the web of the global crisis brought by China. Prices of Chinese stocks in the American market is unstable transferring the same effect to other stocks in the market.
If the European Union wants to avoid being swept away in Chinas wave of economic crisis, it has to come up with proper strategies to solve the internal crises first. They need to start by solving the crisis that poses a bigger threat if left not tackled for long. By order of priorities, Ukraine problems should be dealt with first, as this will give the European Union a united front in dealing with other crisis making it easier.
George Soros was offering this insightfrom Bloomberg during the economic forum held in Sri Lanka in January. George Soros was relating the current economic Cris to the economic crisis of 2008.