Euro Crisis
Definition
The Euro Crisis refers to the period of economic instability in the European Union, particularly in countries using the euro currency, that began around 2009. It was characterized by high sovereign debt levels, banking system failures, and low or negative growth.
Analogy
Think of the Euro Crisis like a group project where some members aren't pulling their weight. If one or two members (countries) start to struggle with their part (economy), it affects everyone else's grades (the shared euro currency).
Related terms
Sovereign Debt: This is money owed by a country’s government. When governments can't pay back their loans, it can lead to an economic crisis.
Austerity Measures: These are reductions in government spending, increases in tax revenues, or both. They're often used during times of economic crisis to improve fiscal responsibility but can be controversial due to their impact on citizens' lives.
European Central Bank (ECB): This institution manages monetary policy for countries using the euro. During the Euro Crisis, it played a key role in trying to stabilize economies.
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