The Single European Financial Market: Euro-Zone Debt Crises and Its Regulations

The intent of this work is to present the single European financial market and discuss the pros and
cons of its integration in the European Union, the Euro-zone debt crises, its strict regulations
(austerities), and its effect on the member-nations’ economies, financial institutions, financial markets,
employment, national wealth, and social welfare. An efficient (uncorrupted) financial market might
increase return, reduce risk, improve investment, production, and liquidity in the economy, but at the
same time, inefficient monetary policies can cause bubbles, unemployment, dependency on foreign
capital and multinational firms, and the worst of all the investors lose their wealth and the social
welfare is declining. Governments have to increase regulations and improve efficiency of the financial
market. Financial markets and institutions (investment banks) have proved recently, with the latest
financial (debt) crisis, which has been created by the uncontrolled private institutions that they cannot
improve stability and certainty. The financial market is a source of long term capital, but banks can
provide similar and less risky services. The European integration with its dubious Maastricht criteria
and the common currency, among different nations, have created an enormous social cost to the
member-nations and their benefits are too small to cover it; especially, the loss of public policy (fiscal,
monetary, and trade), the forced privatizations, the Troika’s austerities for the members and the
destruction of the sovereign nations are irreplaceable. The optimal level of integration of the European
financial markets and the prevention of its crises are the ones that can maximize the social welfare of
the member-nations.