The European debt crisis is a recent financial event that has affected many different countries around the world. Europe has implemented the Euro as a common currency among 17 countries. There are also 10 countries in Europe that are a part of the Eurozone but do not use the Euro as their currency. The Euro crisis was preceded by the global financial downturn that soured economies throughout 2008–2009. Europe has accumulated a lot of debt and has been struggling to pay their debts back; this has led to a financial crisis. The European crisis was driven by excessive debt and the need for many government bailouts. This debt has damaged the European currency and pushed many nations into a recession, and this has led to high unemployment and widespread poverty. The governments in Europe have been trying to cut spending and raise taxes but this has led to many protests and riots. When growth slows, so do tax revenues – making high budget deficits unsustainable. "Some experts say Europe's economic woes are holding back economic recovery in the United States by undermining consumer confidence, exports and investments and that the U.S. government should do more to help Europe fix its problems. (Hack, C 2012)" They say that if those on the Atlantic are having financial trouble it immediately affects those on the other side. Even after the US has taken measures to recover from the 2008 financial crash the US is still affected by the problems in Europe with the European banks.
What led Europe to consider a common currency? For many years there was a push for Europe to have a monetary policy, for the countries to have a common currency throughout. Since the 1960's the European Union has been trying to implement the Euro. As stated in the book the adoption of the euro subjects all participating countries to the same monetary policy. The European Central Bank is responsible for setting monetary policy for all participating countries.