The Eurozone – hot or not?
The European Central Bank has its tenth anniversary this year and the year is shaping up to be one of the toughest of the last decade in terms of economic management. While the Eurozone has generally withstood the global credit crisis very well, there are some possible problems emerging and the ECB will have to manage interest rates carefully to cater for the conflicting demands from economies at different stages of the business cycle.
If the Eurozone is on fire, will the ECB get burnt? Observer (1/6/08)
More testing times ahead as the euro turns ten Times Online (26/5/08)
Euro growth better than expected BBC News Online (15/5/08)
Questions
| 1. | Explain the role of the European Central Bank (ECB). |
| 2. | Assess the difficulties faced by the ECB in setting interest rates for the whole Eurozone. |
| 3. | Discuss the extent to which the economic performance of stronger countries in the Eurozone will be constrained by weaker-performing economies. |