Eurozone crisis

The Eurozone crisis also known as the European debt crisis, was a multi-year debt crisis that happened in the European Union.

The crisis happened due to a currency crisis, which is a stop of the flow from foreign capital into countries that were dependent on foreign lending. The crisis became worse because the countries couldn't devalue the currency (reduction of the currencies value) due to the Euro being a shared currency.

Controversies

EU treaty violations

The EU's Maastricht Treaty contains information that forbids that partner countries bail out another partner country, mainly to stop the spreading of public debt. The clause is designed to encourage good fiscal policies.

The European Central Bank's purchase of country bonds can be viewed as violating the pa trt of the treaty forbiddinghe financing of budget deficits.