What is the european euro debt crisis?

its the money they have borrowed in the market.they need to pay people..there is no economical growth and the cost of commodities is going up however te currency has become so weak tht ppl cant pay for them|||The crisis results from high level of debt coupled with slow economic growth. Like most other countries, european countries have a budget deficit and finance it by issuing debt ( similarly to the US). The problem is that because of the euro, each eurozone countries lost their control over the currency.


For example, if the US wanted to repay their debt instantly they could just print more dollars (this would dramatically weaken the dollar, but the point is that they could print money).


In Europe, the situation is different. For example, Greece can't repay its debt by printing money because the control over the euro is attributed to the european crentral bank (ecb). Because each country within the eurozone has different needs, it is hard to come up with a unanimous approach and it therefore involves a lot of politics. The problem with the euro is that it groups some countries that are very different in nature. For instance, Germany, France are very different from Greece or Ireland.


How countries ended up with high levels of debt? By spending too much money i.e. Social benefits, pensions etc. and by being inefficient at collecting money through taxes. For example in Greece, a third of citizen never paid taxes... Some pensions were paid to hundreds of greeks (who have been dead for years but pensions were still paid due to lack of controls).


Debt is usually financed by revenues (taxes) and growth. Growth is almost 0% at the moment (with some countries like Spain experiencing near 20% unemployment). As a result there is a need for reforms to ensure that government budgets become healthier.