The implications of the Euro-Zone Crisis and Its Impact on India Essay

The implications of the Euro-Zone Crisis and Its Impact on India Economy - Essay Example India is not part of the Euro-zone but it is a recipient of the crisis as the zone forms its larger market in Europe. We shall look more on the Euro-zone crisis; its genesis, forces behind it and the measures taken to deliver it from total breakdown. We shall also be seeking to understand India’s economy and the economic imbalanced it can be if its market is understood. Lastly we shall conclude with the long term effects of the global economy in India. The Euro-zone is a union composed of 18 member countries that use Euro as a common currency. The countries in the Euro zone compose of Netherlands, Slovakia, Italy, Latvia, Ireland, Luxembourg, France, Finland, Germany, Cyprus, Estonia, Austria, Belgium, Slovenia, Spain, Greece, Malta and Portugal, (EU publication office 2009, 23). The euro zone is under European central bank that is governed by a president. It also has a board that oversees the working of the bank. The bank is mandated to see that inflation is put under control. There is also the euro group that makes decisions regarding the politics of the union and the euro (Gupta & Gupta 2010, 42). In the late 2000, there was a financial crisis and the Euro group acted by establishing provisions that would allow the group to give emergency loans to member countries in return for endorsement of economic reforms. These helped the member countries to get onto their feet from the high-unanticipated inflation that had taken centre stage in the many countries (Singh 1997, 82). Many countries member of the Euro zone do not use the Euro currency as the main currency in their countries but use it to do business in the Euro zone and European Union at large. There are other countries that are part of the European Union but do not fall under the Euro zone. These countries include; Andorra, San Marino and Vatican City. They use Euro as their currency (European communities 2004, 94) A number of factors caused the Euro zone crisis. These included