North and South Divide

Northand South Divide

Northand South Divide

Thedivision in Europe has been brought about by several factors that ifnot addressed, can be detrimental to the growth of the continent as awhole. Europe, being divided in South and North has different kindsof population, cultures, cities, growth capacities and several othermore. The Euro crisis has been majorly linked to the difference inexpenditures from the different forms of governments in north andsouth Europe. Again, the inability of the countries to implementsound policies that would protect their currency has been anotherproblem. This paper discusses the specific differences between thesouthern and the northern Europe and the measures that can be takenby the European Union to tackle the issue.

Thepopulation of northern Europe majorly increased through immigrationin the early 19thcentury. The Irish, Germans and most other Europeans settle in thenorth. The southern part of the continent was mainly composed ofAfrican slaves. This means that southern Europe is majorly composedof farmers, where large farms were owned by the very rich people whoowned the slaves. In the north, the economy is based on manufacturingwhere there is a lot of industrialization. Since the northern Europeis occupied by immigrants, they mostly dealt in goods and thisinitiated industrialization. The southern part of Europe is made ofthose who practice agriculture and this has brought the difference intheir economic activities. Textile was the very first activity andthe raw material was cotton which was grown in the southern part ofEurope. In culture, the northern Europe was based on the lives in thecities which was considered to be prestigious. The prestigiouscolleges and the universities were for classes unlike today that itis open for everyone. The southern part of Europe had theirlifestyles based on farming. There was no much exposure and the samehappens to date (De Grauwe, 2013).

Inthe recent summit with the aim to rescue sixty five billion Euros,the northern countries were pushing for a way of making some loansand helping the southern countries grow. Germany has been trying topush for better employment opportunities in other countries likeItaly, Spain and Greece. In this push, the countries are in aposition to bring up their unemployment issues. In this case, thecountries mentioned are not in the same economic level and this couldbe hard to level up. Spain and Greece are not equal economically. Thechances of satisfaction from Germany would be a little harder. Spainand Italy could be so hard to rescue owing to their size anddevelopment. This would pose another challenge to the northerncountries especially Germany. Changing the economic culture of thesouth would mean that the southern countries should embrace thecultures of Germany and this will pose a threat to their own lives.From this, the Germany maintained that the banks from Spain are notto be assisted directly but they must be helped through the nationalgovernment. These kinds of disagreements are bringing down and makingslower the economic unity of Europe (Bagus, 2011).

Thecurrent situation in Europe is that the Northern part feel the burdenof the southern Europe and this has brought the huge economicdifferences and this is a huge obstacle to growth. The politicaldifferences cannot be solved owing to the different ideologies ofeach country. The summit which requires that the countries operate ata common ground is met with differences that would be hard to solve.The less developed countries in Europe have the feeling of not beingpart of the larger continent and this has led to differences inunderstanding. The personal differences between the countries inEurope have been a barrier to the solution that would be sought forthe problem. Currently, countries like Finland, Germany andNetherlands are in a crisis that would be hard to bring themtogether. On the other hand, Italy, Spain and Greece are having theirproblems. The differences will be a continuous obstacle to coming upwith a lasting solution to the impending problem. The value of thecurrency has been constantly dropping and this can be traced back tothe less developed countries of the continent. The huge debts affectthe value of the currency and without a lasting solution it would behard to regain the value of the Euro. The huge fall out in reason andideology is linked to the inability of the countries to make a singleconclusion (Feldstein, 2012).

Tosolve the current situation in the continent, coming up with adivided Euro currency such that the southern part can have adifferent currency as the northern side can be necessary. In thissolution, the feeling that the southern Europe has reduced the valueof the currency because of the inability of the south to make choicewould be removed. The fact that there are breaks in other countriesduring the working hours brings about the feeling of these countriesbeing lazy hence being unable to make good produce. The fact that thenorthern Europe works harder for the development and the value of thecurrency would be reduced since the southern Europe will have to beresponsible for the own growth without depending on the hard work ofother countries. Responsibility will be taken and these countrieswill have a way of handling their own values. The move to divide thecurrency in line with the blocks will be helpful towards the growthof countries like Greece and more value will be gained (De Grauwe,2013)..

Loaningthe state or private banks can be a hard choice to make in such acrisis. The fact that the debts can be hard to pay through statebrings about direct loaning of the banks. When the European Uniondeals with the banks directly, it will have a bargaining point of howthe loans are repaid and the specific period of its application. TheUnion is expected to understand the state of the countries that it isdealing with and this will reduce the chances of growth. When theloans are given straight to the banks, it would be a lot easier totrace them and this makes it more efficient in growth of thesecountries. The national governments should be given some loan but nobeyond the limits of their capability. The southern countries mustmove away from the national economy to domestic economy. This methodwas employed by Finland in the 1980s and it helped in removing themfrom their economic recesses. The southern Europe can move from theircurrent situation to a better one when a good policy such as wasapplied by Finland is in place (Bagus, 2011).

Thirdly,the individual Europe countries should seek to understand and knowtheir counterparts. The countries are not interested in knowing thechallenges other countries face. France has no idea about whatGermany faces, Denmark and Belgium have no knowledge of the eachother and the problems they face and this has reduced the chances ofgrowth and stabilizing the currency. When the individual countrieshave a way of understanding the operations of the others, it would bea lot easier to come up with a solution. From the latest summit, eachcountry was basing its arguments according to their capabilities andthis would be unfair to other countries. The fact that there existdifferent cultures and economies should create a room for a differentway of observation and argument (Mathias, 2014).

Thepoor economic performance of the southern Europe cannot be linkedwith the working hours. Statistics show that in Greece, the citizenswork for about 2032 hours per year and in Italy, it is 1774 hours peryear and 1431 hours in Germany. This rules out the possibility ofextending the working hours. The difference between the northern andsouthern Europe is the fact that the most developed northerncountries tens to receive more assistance from the government andthis makes their work easier hence developing the country. On theother hand, countries like Greece receive little governmental supportand, therefore, make it hard for the citizens to develop. Europe as aUnion should keep checks the governmental activities and theirexpenditure to reduce their extravagance. The reduction inexpenditure can be used to fund the internal activities hence raisingtheir economy (Eichengreen, 2011).

References

Mathias,M. (2014) Mediterranean Blues: The Crisis in Southern Europe. JournalDemocracy: 25(1)

Bagus,P (2011), “The tragedy of the Euro.” The independent review,15(4) 563-576

DeGrauwe, P., Ji, Y (2013) Self Fulfilling Crises in the Euro zone: AnEmpirical Test. Journal of International Money and Finance 34(1)15-36

Eichengreen,B. (2011) The Euro’s Never Ending Crisis. Current History. 100(734)91-96

Feldstein,M. (2012), The Failure of the Euro: The Little Currency thatcouldn’t. Foreign Affairs. 91(1), 105-116