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The article entitled ‘Europe’s Debt Crisis, the Free Market versus the Total State’ was published in the “Market Oracle Magazine”. The author faulted Europe’s relationship with the banking industry. The article further criticized weak financial management laws in most European states. According to the article, most European banks owed vast sums of money to the foreign banks. This scenario depicted Europe as a continent that was on the brink of financial collapse. The article pegs the current eurozone financial crisis the issues highlighted (Gary, 2011).

The article mainly focused on the perpetual faults that have existed in the euro-zone since the beginning of the 19th century. Banks in most European countries operate on weak laws. There is no strict legislation governing long-term debt and lease financing. According to the author, Europe main financial problems found on the 1990 European treaty. He seems to believe that the euro-zone crisis can be mitigated through amending the treaties concerned with time value of money in the eurozone. The other solution would be to consolidate the eurozone into an amorphous one state and enact legislation to allow the European Central Bank monitor activities of capital markets and investment banking in the euro-zone (Gary, 2011).

In my opinion the article’s views in regard to the eurozone crisis are valid. The current financial crisis being witnessed in most European countries came as a result of expanding governmental debts. Just as the author pointed out, most governments haphazardly borrowed from the financial sector. Furthermore, most eurozone governments invested in projects that could not generate resources instantly. This situation made most countries in the European Union unable to repay their debts. Greece is a classic case; the country was plunged into serious debt that made it unable to finance its recurrent expenditure. The author lists the issue of trade imbalances within the European Union as the other factor that contributed to the current financial crisis in Europe. Indeed the question of trade imbalances needs to be dealt with conclusively if Europe wants to attain economic superiority. Trade imbalances coupled by stiff financial policies disadvantaged some countries within the European Union. This issue exposed countries like Greece, Portugal and Ireland to debts.

The eurozone crisis is majorly caused by other external factors and not just internal problems as suggested by the article. Most countries in the world are facing economic hardships occasioned by high fuel cost and poor economic conditions. Although, Europe needs to merge into one state in order to benefit from economies of scale, most economies in the eurozone are fundamentally sound. The other factor that has contributed to the European financial crisis is suspicion among the member countries. Most countries have not fully liberalized their markets because of the fear of losing sovereignty. The current crisis has left many people without jobs and the means to make a living. Greece, for instance, dismissed a lot of people in order to boost economic growth.

Code: Sample20

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