The euro is the source of many concerns in the global economy today.

The current focal point of the euro zone sovereign debt crisis is Cyprus. The small island country has drawn the attention of many, keeping the world in suspense of what actions they will take next.

Over the weekend it was assumed that Cyprus’s parliament was going to reject plans set out by Euro Zone officials. According to Marc Jones of Reuters in London, the euro is near an all-time low with a recent 0.1 drop ($1.2946). These numbers also came with warning signs of Cyprus and the political statement of Italy, raising the risk of the crisis getting worse again.

The draft bill that was created by the government was made to relieve some of the public anger by making a deal that levies a tax on savings above 20,000 euros, instead of all of the funds. Leaders of Euro Zone have urged Cyprus to allow the smaller savers to escape the levy, however if parliament cannot come to some kind of agreement, it raises the risks of defaults. The effect of the euro nearly being worthless is killing the living situations in Greece, leaving many in horrible conditions.

FIFTH YEAR OF RECESSION
Greece today is in its fifth straight year of a recession, leaving nearly twenty- two percent of the country without jobs, and thousands in the streets. The outlook and future does not look like there will be any kind of improvement at anytime soon either.

A term thrown around by economists to describe this problem is contagion. This occurs when a single country such as Greece cannot pay their bills and subsequently the costs of borrowing are raised in other countries, like Spain.

In this case, Spain has struggled to keep their banks liquid and been forced to ask for multiple loans. The loan money has had to come from wealthier, northern countries like Germany, putting a strain on their economy and eventually the European continent as a whole.

GLOBAL CALAMITY
The overall outlook for the euro is grim with few signs of any kind of rally in near-term. This situation is impacting the European economy as whole, and has become a global calamity.

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[What do you think of the Cyprus proposal? Leave your comments below.]