The yarn ball of Europe is quickly unraveling, trying to mend the growing tear in the Greek economy. Germany is leading the way, perpetually shoving stimulus money into Greece in order to preserve Europe’s economic health. An economic collapse in Europe can mean big things, not only for Europe’s neighbors, but also for Elizabethtown College students.
Greece’s debt is 145 percent of its gross domestic product (GDP), meaning it will not be released from its financial obligations in the foreseeable future. According to CNBC, Greece holds $350 billion in loans, which will continually inhibit its ability to regain its economic stability. Along with Greece, Portugal and Ireland have the potential of default tearing through the seams of their economy. The European Union, a common market that employs the Euro as their currency, is quickly falling apart, due to increased inflation and the Grecian debt crisis. Recently, the EU voted on a bailout plan in hopes of restoring the euro zone, according to CNBC.
According to CNBC, the bailout encompasses one-trillion Euros ($1.4 trillion), which would be allocated to the ailing countries of Europe. The bailout plan is being predominantly funded by Asian states, such as China and, possibly, Japan. These Asian countries are optimistic about the potential return from their investment in the European bailout plan. If there is no substantial return, this would damage the political alliance between Europe and the participating Asian states. This places immense pressure on the European economy to be successful in the coming years.
Etown houses a study abroad program, which encompasses 26 countries, 9 of which are located in Europe. Nationally, 3 percent of students study abroad, in comparison to 10-14 percent of Etown students who study abroad.
Beth Pearson, a sophomore social work major who plans to study in Ireland, expressed a sense of security with the Etown study abroad program: “I have faith that they will not send me anywhere that would put me in a bad political position.”
First-year Brett Williams, an international business major, explained the need to save money prior to his experience abroad: “I need to save so I’ll be able to be fiscally stable. Europe’s difficult economic times will definitely make my wallet thinner.” Williams, who plans to travel to France, will have much adversity to overcome.
Nicolas Sarkozy, the French president, released a statement in late October explaining the French economic climate. Sarkozy said, “We have entered a new world … If we want to defend the French social model, we will need to take the necessary measures.” France’s GDP is expected to increase by only 1 percent during the 2012 fiscal year.
International student Masaaki Kobayashi states, “The American people do not realize how well off they have it … Other places have it much worse. That’s why I left Japan to come here. At Etown I have a better advantage.”
The current recession, which came to light in Oct. 2008, is partially due to many poor financial investments, financial expenditures exceeding total income and fiscally irresponsible governments increasing their nation’s total debt.
Greece, which attracts several Etown study abroad students each year, has been feeling the hardship, coupled with intense riots and a turbulent political atmosphere. This crisis, which started shortly after the global recession of 2008, has escalated, forcing the EU to cut back on its support of Greece. Greece’s economic problems stem from political corruption, according to a study by Transparency International. In Greece, eight political parties participate in the government, which makes it difficult to agree on any recovery plan. Due to the integration of EU members’ economies, when one state of the EU goes through a calamity, the other members are inevitably hurt. Many economists, such as Alan Greenspan and Ben Bernanke, believe Greece is the tipping point in the European economic state.
Steven DiGrazia, Etown alumnus and former senior class president, studied in Barcelona, Albany and Cadiz. He expressed concern about traveling to Europe currently: “Traveling can be expensive; be sure to plan it right. Travel to places like South America that are cheaper [than Europe].”
David Nagel, a first-year who plans to travel to Europe this coming summer, expressed caution in his decision. “I’m worried about the cost of the plane tickets, due to the unstable economy. You never know, the prices could triple by summertime,” Nagel said. For example, an economy class plane tickets to Greece currently cost over $1,000, according to www.aa.com.
The euro zone is perpetually facing challenges, especially with the global economic issues growing. The recently established bailout plan has potential to resurrect the shrinking yarn ball of Europe. European tourism has potential to bolster the economies. Consequently, students who study abroad support market sectors that may lack consumers during this economic downturn. However, students who plan to study in countries facing extreme economic difficulty should be wary; if Greece (or Spain, Ireland or Portugal) fails, students can expect alterations in their travel or study abroad plans.