Eurozone crash

Guess what! I'm not going to talk about TV or politics! I know I'm as shocked as you are, instead I'm going to apply my wonderful 18-year-old wisdom to a new non-science topic (very wierd for me, but I guess I'm just getting all my science fill in other places, but no one ever wants to here me talk about TV or politics) I'm going to talk about economics!

Unless you have been living under a very large rock for the past year, you probably know the eurozone is in trouble, and by in trouble, its in huge trouble. Greek, Spain, Ireland, Protgugual, you name it are all frankly scrabaling to right there economies to avoid a Eurozone crash. But what does a Eurozone crash mean, and what will it hold for the rest of the world? Well as my extensive google search, by which I mean I clicked through to page 3 of google search results yielded no answers, I'm going to make some up myself.

Firstly by Eurozone crash, I am going to refer to the Eurozone breaking up, basically everyone going back to their respective currencies before the Euro. So what would happen? Well firstly very bad things for practically everyone in Europe. The big countries, like Germany, who have a strong economy, would suddenly find that their dollar is much stronger, (like what happened to Australia about 5 years ago) and thus bad for both tourism (why would you go somewhere with a strong dollar?), exporters, as they would have to lower their price, and thus profit margin, to remain competitive, and drive away further investers. Now Germany has a pretty strong economy, it would almost definitly survive, but it would take a pretty serious hit, as would global markets, because Germany is such a big exporting nation. This could actually possibly be good for other exporting companies, as they would have a chance to move in on Germany's share on the market, but Germany would probably have to do some belt tighting measures, which combined with the other countries in Europe, could seriously impact of global markets, as their share would no longer be there.

And secondly it would be very, very, bad for small struggaling countries like Greece, Ireland, and actually a lot of countries in the Eurozone. Without the stabaling balence of the Eurozone, their currency vaule would pulmit, making it even harder, if not impossible to pay off their massive loans, which would simply get bigger with interest, resulting in high inflation and probably bankrupcy, also effectivly taking these countries out of the global market, which would obviously have a huge impact.

So the Eurozone crashing sucks if you're in Europe, but what about the people around the world? Well it may actually be good for countries such as India and China, with less competitors in the global market for exporting, but not really anyone else. With Europe's share in the global market diminishing, and thus not buying as much, thats a hefty part of the world companies can no longer sell to. Trade plays a huge roll in moderating the economic climate, and with trade right down, it is not at all inconceivable that there could be another world-wide rescission. Which of course with the world just recovering from the one 4 years ago, would be a very bad thing. Another likely result, but not one oft connected is that Obama would almost definitely loose the upcoming presidential election, or at least his chances at winning would be diminished. Economic factors, especially change in economic factors in the election year, have by far the biggest impact on the election. Voters rarely consider social factors in times of economic hardship, and many voters will probably view the recession as a failure by Obama. Not to mention Obama is currently doing very well with a high job creation rate (if there was one peacetime factor that influenced politics the most, it would be the change in number of jobs) a number that would surely plummet if the Eurozone crashed.

Wow, well looks like I did talk about politics after all, but that what I think will happen if the Eurozone crashes. Fortunately its not very likely, thanks to Greece and other countries electing to adopt further austerity measures, and bailout funds from the IMF, but there is still a long way to go, before the crisis is really averted.