Politics and Governments in Europe

Eurozone Crisis
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Introduction
The year 2009 is one of the darkest years in the history of the European countries, or it can also besaid the year that marks the start of a dark era. Starting from the year 2009, a good majority of the European orient have been faced with steep debts that crippled the European economy. What’s worse is that most of the countries that experienced the economic crisis that came in the year 2008, have since recovers and quite a number of emerging markets are also looking promising such as India and china. A good majority of the European nations, however, never recovered from the reception and thus have been struggling since; as such, this crisis has been labeled the Eurozone crisis, seeing that these are countries that use Euros a currency that and been introduced earlier to these nation (Forbes, 2015). The European nations have run into so much debt that they are not in a position to bail out their governments and what it owes the banks.It is with the help of the European commission,European central bank and the international monetary funds that some of the nations have been able to at leastto rise above the tides. Even with the Maastricht treaty, most of the countries still went into debts and spending deficits as they were using substandard and sometimes complex financial systems to mask their debt(Theodoropoulou, 2014). Different countries in the European Union were affected differently by the crisis; however most of them are still struggling with the crisis years later. Between Greece and Portugal, the latter seems to have handled the situation with a lot more consideration without a rush to revive the economy without compromising n the welfare of the citizens.
Thesis statement: Portugal handled the economic crisis better that Greece in light of the welfare policies during the Eurozone crisis and their debt problems
The Eurozone crisis explained
By the year 2007 most of the European nations seemed on the surface to be doing fine economically apart from Greece that was well canvased. The rest were showing signs high public debt despite the fact that they still held on.Most of the nations had devised tactics which they used to mask their scrupulous dealing while negating the public eye and evading international scrutiny. The global credit crunch however changed the status of most countries and exposed the vile underneath creating panic and disillusionment. A good majority of the European commercial banks were exposed to the bad debts and thus lost millions in the crisis. For example there were the subprime mortgage debt bundles that saw the property bubble crush the economy further (BBC News, 2015). The recession that took place in the year 2008 and 2009 also saw the banks experience a fall in the ability to lend and invest, which further caused a plummet of the economy.
As the recession grew, the house pricing in most of the countries came down, this further hurt the banks that had heavily invested prior to the real estate bubble. Banks lost billions of euros through this shift. As a result of the recession, the governments suffered immensely froma declining economy. Less people were working as companies laid down some of their staff to grapple with the stiff times and thus the government received fewer taxes. Given that people and most companies were now spending less due to the cut backs to withstand the crisis, for the government this means less tax still. Over time the ratio between the debts and the GDP rose sharply, further complicating the situation in the Eurozone. This means that as the debt levels rose to staggering figures, the GDP for most of the states was also steadily falling below manageable levels (BBC News, 2015).
In response to the crisis, most of the states went into a panic-mode as lenders hiked their lending interest rates. Most of the governments raised their taxes in an effort to raise the revenue levels while trying to reduce the amount that went into the expenditures. The most affected nations by the crisis were Portugal, Greece and Ireland, while countries like Germany, France, Switzerland and Belgium benefited from the crisis as they used zero rated and even negative rates on interests. This meant that most of the investors run to this countries while flee from the troubled trio in the Eurozone (Pettinger, 2012).
Greece
One of the elements that is striking about this country and the crisis that has since ensured following the world economic recession in the year 2008, is that; even before Greece joined the European Union, it was still living beyond its means (Sciama, 2013). This was also increased by the aspect of the single currency introduced among the union members. In an example the public wages for the state rose up to 50% in the years between 1999 and 2007, which was too fast considering other nations in the union, were still sluggish on the same.Having joined the EU in 1981, Greece had been a member for some time but there were hiccups to its membership. One of the aspects that contributed to the crisis was the adoption of the euro currency back in the year 2001 (Petmesidou, 2013). At the same time the country had always operated in deficit budgets such that it did not meet the bear minimum set out in the Maastricht treaty.
Although for some time the country benefits from the power of the euro, it later revealed that it misinformed the EU so as to become a member (BBC News, 2015). Up to this point Greece had been enjoying investment capital, loans and the low interest rates. The EU ironically did not impose ant sanctions as would have been expected, given that Germany and France at the time were also spending above the limit set out in the guidelines (Petmesidou, 2013). The EU could have expelled Greece, but that would have badly damaged the strength of the Union and they could not have risked that aspect. More importantly the EU wanted to be strong not weak in the eyes of the other nations. EUneededtoshow countries like Sweden, Denmark and the UK that the Euro was a viable option; expelling or sanctioning Greece would have done the exact opposite.In 2009 the new government admitted to the fact that its budget that year would be in a deficit amounting to more than 12% of the country’s GDP. This was quite low considering it was more than four times the standard limit set out in the EU guidelines. The Greece crisis has had massive effects on the welfare policies in the country, as the government and the international community try to pull it out of the mud (The Economist, 2015).
Portugal
Like the Greece predicament, the Portuguese were also experiencing the same kind of downtime with the economy plummeting at an alarming rate, following the recession. Quite a number of the commercial banks were accumulating debt relative to the bad economic investments, fraud and hefty embezzlement of funds. While some of the CEOs and their accomplices were arrested, the government bailed some of the banks out of the debt crisis relative to the fact that they were going to have a damaging impact on the economy due to their size(Sciama, 2013). As the European crisis came to the press in the wake of 2010, most of the investors were pulling out of nations like Portugal and aspect that also affected Greece. Much like Greece, the GDP was steadily and fast plummeting whiles the debt increasing at an ever alarming rate offsetting the ratio between the two.
Greece and Portugal Welfare policies dynamics following the debt crisis
As it would be expected, there are a lot of similarities in the effects that took place affecting the welfare policies as the two countries try to improve their status. At the same time, given that the two are receiving a considerable amount of pressure from the EU, the similarity is quite striking with some notable differences as well.
Following the inability of the two governments to borrow from the markets, they were both forced to establish and implement austerity measures as pressure mounted from the European members. While the measures have helped to regain some control of their economy there are changes in the welfare policies that have greatly impacted the citizens in the two countries (Zartaloudis, 2014).
Some of the welfare policies that in both countries have affected the citizens relate to the pensions for the senior citizens. In both nations the retirement age for the senior citizens went up while their pension threshold was revised. Staffs that were getting their pension in the two countries would in the past enjoy holiday bonuses such Christmas, summer and Easter bonuses. All of these bonuses were done away with meaning that most of the pensioners lost considerable amount money through the revision of the welfare policies (Theodoropoulou, 2014). This was an effect of curtailing pension to a selected few and introducing more restricting policies relative to the pension benefi...