Literature review
The arrival of the economic recession in the world during October, 2017 highly triggered debt crisis in Europe with the Greek government adverse effects in such crisis. The major causes of the debt crisis in Greece are believed to be the structural weakness of the economy of Greece and debt to the levels of GDP as well as high structural deficits that existed in the public accounts of the country for more than a decade (Federal Ministry of Finance, 2017). Investors have been held back by the by fears concerning the debt crisis of the country and they heavily questioned the ability of Greece to meet the debt obligations it had since the levels of debts of the government highly increased.
The question as to whether Germany should save Greece from financial debts is a question that has been received by mixed reactions from the voters in the country. One can reason that German, being one of the rich Europe’s rich countries should aggressively make contributions that would help Greece overcome their debt problems. The rate at which the economy of Germany grows on the other hand makes influences the country to take the opposite direction towards helping Greece. The act of balancing the responsibility of helping other countries in Europe and managing the growth of its economy has become an emerging issue in Germany and leaves it torn between helping Greece or concentrating of the issues of its economy.
Historically it is true to argue that Germany should help Greece solve the problem of financial crisis. Greece helped Germany during World War II and it is argued that the aid they gave was the root to their financial crisis. Germany should thus uphold moral standards by giving aid to Greece to bail them from the current financial problems that the country is faced with (Sfakianakis, 2017). The fact that Greece helped Germany in World War II alone does not give the country a guarantee to get financial aid from Germany. Several issues hold Germany back from bailing Greece out of their current financial situation and various arguments have risen regarding the right choice that Germany should make regarding the crisis in Greece.
The fact that Greece gave aid to Germany during World War II does not make it deserve financial bailment from Germany (Sfakianakis, 2017). Germany is likely to damage their political and economic interests when they permit Greece to default their debts. Financial aid, if given to Greece, may cause a collapse in the economics of Europe’s trading partners. The cost of such a collapse to Germany may become more adverse than the cost they would incur in helping Greece (Sfakianakis, 2017).
Countries that are opposed to the idea of bailing out Greece may restrict the trade with Germany if it does so. This may pose great effects to Germany as it will definitely result to a fall in the economy. Some countries may also view it that Germany has given political interests in Greece. Such countries, especially if they are foes of the Greece government will generally restrict their relationship with Germany. This may mean that Germany will suffer both economically and politically if they give Greece financial aid. The costs Germany is likely to incur is far much greater that the benefits of helping Greece. The country thus needs to highly consider the decision before taking any actions.
The importance of Greece in the Euro zone is very important to various countries, Germany included. If Greece falls out of the zone, many countries will face a series of impacts as changes in relationships and trade will occur. The importance of Greece in the Euro zone makes it necessary for Germany to continue bailing the country from its financial crisis so that it continues being part of the region. Though this may convince Germany to help Greece, the dilemma comes in the issue of German voters who are not expected to accept the idea (Plumer, 2017). The voters have the belief that rescuing Greece will never solve the root problem, but will instead add injury to the economy of Germany. The decision is made by the voters and the head of government has no say once the voters turn down the idea.
The idea of providing assistance to Greece has been seen by Germany as an issue of seeking assistance to problems that Greece created for itself. The assistance will not solve the problem as Greece will not implement measures to curb any future financial crisis. They will rely on aid to solve even their future problems. This has made Germany come out clearly and state that Greece should cease from seeking further assistance from other countries and find a favorable solution to the problem (Osborne, 2017).
Greece is just one among the 17 nations in Euro zone that are faced with financial crisis as a result of debts owed to other countries. Helping Greece may be viewed as a measure Germany is taking to help countries in Euro zone with financial crisis solves their problems. It may mean Germany will take the initiative of helping the other countries after helping Greece. This obligation is not possible, and helping Greece alone may result to rivalry with other countries. Germany thus see it wise for Greece to fulfill the promises it made to other countries when taking debts (Osborne, 2017). This will make things even as Germany cannot help all the other countries settle their depts.
The growth of the economy of Germany has been as a result of the relations in the whole Euro zone. Making a decision that will hinder such relationships may prove vital for the country. The influence that Germany has in the whole region makes it necessary for the country to put its focus on the whole region, rather than in one country (German election Blog, 2017). The voters in Germany believe that the country should put more emphasis on issues that benefit the world rather than concentrating on the crisis in one given country. The focus of Germany should not be in the financial problems of Greece, but in expanding relationships with other countries in the world.
The government of Greece on its side should also stop concentrating on asking form Germany and find the long-term solution to the problem of financial crisis. The government should come up with programs for reform that will ensure the problem is fully solved and the image of the country fully restored in the region. The debt the country owes investors and other nations have made it lose trust among many partners, affecting the relationship of the country with other nations in the Euro zone (Kirschbaum, 2017). Greece should stop concentrating on asking for the help of other countries to restore their economy and should instead implement immediate reforms that aim at ensuring the economy and trust is restored in the region
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