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  • Essay / What are the causes of the economic crisis in the euro zone?

    The Greek government has pledged to significantly reduce its spending, equivalent to 1.5% of its production (BBC). Greece has also pledged to reduce the minimum wage and make the labor market more flexible. Greece also introduced a new property tax and suspended 30,000 part-wage civil servants (BBC). These measures were deeply unpopular with the Greek people and led to a wave of protests and crippling strikes (BBC). In Italy, they have increased healthcare costs and cut regional subsidies, family tax benefits and pensions for high earners. Italy also cut public sector salaries and froze the recruitment of new employees (BBC). The new plan provides that only one employee will be replaced for every five departures. In the Republic of Ireland, public spending has been cut by €4 billion (BBC). The salaries of all civil servants have been cut by at least 5% and social protection has been reduced. In addition, family allowances were withdrawn and police stations were closed (BBC). In Portugal, the government introduced a 5% pay cut for high earners in the public sector and an increase in income tax for high earners (BBC). The military budget was also cut and widespread privatizations took place. Following these cuts, public sector workers staged massive protests against the measures (BBC). In Spain, civil servants' salaries were frozen and departmental budgets were cut by 16.9%. As a result of these reductions, there are