The last few years have been filled with concern over the fate of the eurozone. From rampant austerity measures to decreasing bond ratings, the debt crisis and the current recession, fear over the future of the zone and its economy has even affected even U.S. stock markets.
If you’re considering moving abroad to one of the eurozone states, you should have a firm grasp on the economic issues at hand and how they might affect you.
What is the Euro Zone
The eurozone currently consists of 17 different member states including France, Germany, Ireland, Italy and Spain. The eurozone is an offshoot of the European Union which was a post-WWII effort to unite the area and reduce or eliminate the likelihood of future wars between member states. The purpose of the eurozone was to help stabilize the economy of the area through adopting a single currency and creating qualification criteria that encourage fiscal symmetry and stability for the zone.
The Economic Future of the Eurozone
While some countries within the eurozone are facing their economic issues now and making plans to begin recovery, others may not realize the extent of their fiscal issues until next year, thus ensuring a bumpy economic road for the foreseeable future. A November article on CNBC.com states that analysts believe Italy is heading for a protracted recession and expect the country to need financial aid in 2013. Other countries, such as Greece, are still trying to create viable plans to deal with their country’s debts which could mean political shifts, bailouts and further austerity measures in the future.
The Safety of the Eurozone
Many individuals moving to a eurozone state might be concerned about an increase in crime due to the region’s economic woes. In the Department of State’s 2012 Crime and Safety report for Paris, it was noted that there had been an increase in break-ins during the vacation season but that violent crimes were still rare occurrences. The report also mentioned to be wary when traveling through economically depressed areas where smash-and-grab crimes are more common.
In Spain, the Spanish Interior Ministry reported that violent crimes had increased 9.5 percent during the first six months of 2012 and burglaries had risen 7.24 percent. However, when comparing the crime statistics to the population of Spain, the total number of affected citizens is generally less than those affected by crime in the U.S.
While eurozone states may not be quite as idyllic as they once were, researching the news and the briefs from the Department of State shows that crime is still relatively contained and often comparable to that which is faced by U.S. residents.
When a government must control its spending it will adopt austerity measures, or cutbacks, that reduce the amount used to fund social programs such as welfare and healthcare. They may even ask their citizens to contribute by pushing back their retirement age and reducing minimum wage. There has been a history in the eurozone of riots and protests following the announcement of austerity measures. Residents of Spain, Greece and Italy have voiced their anger with violent street riots in 2011 and 2012.
Countries facing economic trouble often have high unemployment rates which leave many citizens struggling. When austerity measures are introduced that can affect the very programs the struggling citizens rely on it can result in rioting within some city centers and can further reduce the local economy, something that expats should be aware of and prepared for.
The Future of the Euro
The economic instability of the eurozone member states has created doubt surrounding the sustainability and strength of their single currency, the euro. This concern can push depositors to deplete their accounts and exchange their euros for other, more stable currencies. This occurred in Spain as €75 billion was withdrawn from Spanish banks in July 2012.
It’s important to consider, however, that the very nature of the eurozone itself creates some protection for the area’s currency, which makes it unlikely to fail anytime soon. The euro is a multicountry currency which means its member states can prop each other up during times of economic weakness and strengthen the currency through measures such as debt mutualization which can spread one country’s debt around to the other countries.
Any U.S. resident planning to move into the eurozone should not only explore the crime statistics of the area but should also look into securing one of the many global medical insurance plans available. Global medical insurance plans ensure that, no matter what happens when you move abroad, you get the medical treatment you need at a cost you can afford.