Eurozone Crisis : United we fall

In the century of globalization and free market capitalism; tightly knit clusters of nations have generally dominated world markets. OPEC and OECD, with oil being their greatest tool, have rewritten rules of world trade. The recently formed cluster of nations – European Union – has climbed the bandwagon, but with an unusual start.

European Union (EU) made up of 27 European nations is witnessing perhaps its biggest challenge after its formation. The Eurozone crisis which initiated as currency crisis has roots of possible banking crisis. Let us first understand the Eurozone crisis, its consequences and Lessons from the Political, Economic and Global perspective.

Political perspective part 1:

Current crisis will likely shift the political nature and workings of the EU. It further weakens already weak ties which exist between its member nations, as member nations face a trade-off between the responsibility to deal with the crisis and their political motives.
Eurozone politicians have enough tools in hand to tackle this crisis. However, the primary hindrance to act seems to be the lack of will to implement these tools. Since the state power is at stake, it becomes difficult for so called (politically motivated) “leaders” to ask private sector to share a slightly larger chunk of the sovereign debt pie. The bail out which was given to Greece was mainly with the motive to avoid the possibility of complete default. However, practically speaking, some form of default may indeed be necessary. This was also acknowledged at the recent EU conference.

“Europe's decline is not just economic — it's a crisis in leadership,” says Damon Wilson, vice president of the Atlantic Council. [1] Unwillingness of leaders of member nations to act upon the crisis and their laggard behaviour has hampered EU as a whole.
The following figure depicts the state of EU member nations. We can clearly see which countries are highly susceptible for further setback.

In addition, many changes will be inevitable on the political front as the crisis unfolds. Political parties in Portugal and Ireland have been thrown out of power this year. Spain will probably follow the suit as well, while leaders in Italy, France and Greece may be in line.
As southern European nations struggle, Germany can definitely take a huge advantage of the situation and become the most dynamic economy of the world.