The article “Can Europe Be Saved” written by Krugman begins by drawing the attention of the reader to the magnitude of the crisis which faced Europe. It defines the problems, elaborates on how the global financial meltdown affected every European citizen and then traces the origin of the crisis and why its impacts were so severe in the region. This type of approach enlightens the reader regarding the issue and is more beneficial to novice economists because it can easily be understood by everybody and give a detailed insight into the matter under the study.
A business agreement between France and Germany that was aimed at easing the process of mining and selling coal resulted in unifying the entire European region by a single currency. As the writer points out, the signatories of the deal which later led to the single currency economy seemed to not have weighed effectively the pros and cons of that economic unity. This is what makes Europe more vulnerable in the presence of recession like the one that occurred in 2011.
A majority of European nations experienced massive job losses and industrial strife. Today, Spain and Greece are still suffering from weak economies and large debts that they cannot address effectively.
The idea of a single currency in Europe was not good right away from its inception. All the European countries had unequal economic influence and political structures. Some, like Spain and Greece, was ruled for years by dictators. Germany as a single nation was split into two with each region having its own market forces. Communism and socialism were two competing market structures all over the continent.
These factors influenced the economic strength of these nations, thereby making some countries like England, which had faced long spells of political unity, stronger than the others. However, the supporters of the implementation of the single currency, such as Milton Friedman, never contemplated the effects that these economic disparities would bear on the future operations of this currency.
In countries with their own currencies, devaluing the currency is enough to alleviate the economy in case a similar crisis occurs. Making a country’s currency have lower value attracts foreign investors and tourists; thus, within a short span, the country will have enough foreign exchange to get it back on its feet. However, with a single currency, there are no such provisions, and the only way out is increased borrowing. When there are no more institutions to borrow from, the economy will simply stumble just as it was in Spain. Moreover, paying back debts is normally a very invigorating process which also may affect the economy and cause a negative effect on it.
The article is well-developed and takes into account all the details because it is written by an informed person on the issue. Moreover, it presents an objective opinion and has a lot of facts to support the ideas drawn by the author. Everybody interested in the economic crisis that Europe faced should, therefore, read this article. However, it is too long; this makes it hard to read up to completion by novice readers. In the course of the article, the writer incorporates the use of jargon that may not be easily understood by ordinary readers. In spite of the few hitches, the article is objective and very factual.