Committee
Eurogroup
Country
Lithuania

Author

Fahad Ahmed
Pakistan

Cite as https://mymun.com/ppdb/8111

Topic A: Proposals for debt restructuring programs for any indebted Eurogroup country

The creation of Eurozone as an economic was meant to unify its members not only in terms of productive capacity, but also in terms of other financial and economic activities. This union was meant to provide a means to economic and financial stability via many benefits and leverage to its members. The idea seems plausible in liberal or free-trade economics, but its lifetime success is a utopia nonetheless if measures for greater stability are not taken. With the availability of many financial benefits, such as low interest rates, via structural reforms borrowing was made easier and less stringent. Such changes led to heavy and unchecked borrowing within and between countries like Greece, Spain, Portugal, Ireland etc. This, therefore, led to a debt climate bubble which burst exacerbating the financial crisis of 2008. Moreover, quantitative easing was used to deal with post-crisis problems, which further increased the debt burden upon Eurozone members.

It is to be duly noted that the problem is not only of the excessive debt burden, but also of the repercussions that follow, such as troubled current accounts and decreased government spending. The carelessness is not merely upon the governments, but also various other institut...