POL208Y1 Lecture : Functionalism and Regional Integration.docx
Document Summary
The euro on life support: by 2011, many european countries had debt to gdp rations that were high enough to make default a serious possibility eurozone officials agreed last october that commercial banks should increase their capital ratios and that the size of the european financial stability facility (efsf), which had been created in may 2010 to finance government borrowing by greece and other eurozone countries, should be expanded from 400 billion euros to more than a trillion euros. Disunion: eurozone has benefits; nations don"t have to worry about fluctuating currencies, so they can more easily do more business across borders, make long term investments anywhere in the market, and build transnational enterprises, eurozone has disadvantages; countries can"t tailor their monetary policies to their own needs by setting their own interest rates; instead, rates are set by the european central bank, whether benefits outweigh costs depends on these things;
