The European Union And The United States Financial Crisis

Since 1950 European Union (EU) was created it has promoted peace, prosperity and values among the member nations and its neighbouring countries. EU’s influential tools, has helped transform many European states into functioning democracies and prosperous countries. EU’s membership has grown from 6 to 28 countries (Enlargement, 2014), satisfying a historic vow to integrate the continent bringing in most states of Central and Eastern Europe (CEE) by peaceful ideals.EU has anticipated the enlargement as an extraordinary opportunity to endorse political strength and economic success in Europe. EU’s extension policy is open to any European state that fulfils the EU’s political and financial criteria for membership; still the political process of inclusion of new state requires a unanimous agreement from all the existing 28 member states. Europe is considered to be more flourishing and safer place due to the promotion of democracy, anti-corruption policy and the single market policy.

When the nancial crisis boomed in the United States in 2007, the worldwide contagion was rapid and extensive and between 2008 and 2012 it turned into a global crisis. One of the most interesting facts 7 is that, while the US managed to recover in 2010, with a GDP growth of 2%, the EU is still

American debt held by households is rising ominously, plus our economic policies change. That debt balloon powered by radical income inequality will become the next bust. It drives by spending on domestic demand or more likely consumer spending not just by the wealthy, but by everyone else. An important explaining about the unity that emerged from our latest research has shown as relatively that ten percent were prosperous, saving, and investment in which natural and interests to find the path of them in the financial markets, but primarily ninety percent had borrowed. As the result many Americans concern about the financial crisis and the cartoon uses to sarcasm, irony, and logos to convey its message.

The European sovereign debt crisis started in 2008, with the collapse of Iceland's banking system, and spread primarily to Greece, Ireland and Portugal during 2009. The debt crisis led to a crisis of confidence for European

In this reflective case study I will discuss the financial crisis that occurred in the U.S. in 2008 which precipitated one of the largest catastrophe within the housing market causing a collapse amongst the financial institutions. I will also discuss about how the banks were at fault for giving out loans to individuals who were not capable of affording to pay these loans back and all financial institutions that should have had regulations on the loans that were dispensed as well. Though, the collapse with the financial institutions was not only because of faulty loans that were given out but the overvaluation of securities which caused U.S. real estate prices to descend, the overvalue from some of the subprime mortgages, financial

This paper outlines a plausible scenario in which the Eurozone fractures in 2012. Events are unlikely to follow

The Global Financial Crisis revealed many flaws in the institutional framework of the Eurozone, as well as the flaws in the policies implemented in the aftermath of the revelation of the crisis. One of the major flaws revealed in the institutional arrangement of the Eurozone project, is the clause in the Maastricht Treaty which limits the ceiling on the ratio of the annual government deficit to gross domestic product. As a result of the Global Financial Crisis, The Maastricht Treaty put into place structural impediments that prevented member states from implementing counter-cyclical policies. It is likely that the crisis left a deep and long-lasting effect on economic performance and overall social hardship. Job losses were contained for some

The Eurozone is facing a serious sovereign debt crisis. Several Eurozone member countries have high, potentially unsustainable levels of public debt. Three—Greece, Ireland, and Portugal—have borrowed money from other European countries and the International Monetary Fund (IMF) in order to avoid default. With the largest public debt and one of the largest budget deficits in the Eurozone, Greece is at the centre of the crisis. The crisis is a continuing interest to Congress due to the strong economic and political ties between the United States and Europe.

On November 1, 1993 the fate of our economy was decided. After one half of a century of waiting, the Eurozone came to a solemn existence. The once great powers of the world, the European nations, had completed a risky, and perhaps foolish, task. The world’s first regional economic system was successfully created. Now, almost two decades later, the world’s economies are on the verge of collapse, and it seems that no economy, other than the Eurozone, is at fault, due to its recent and quite careless economic endeavors. As the rest of the world continues to force the blame upon the Eurozone and its twenty-five member states-including the United Kingdom of Great Britain and Northern Ireland, France, Spain, Portugal, Italy, and Germany, we

Unlike the United States, Europe was not founded by immigrants making it difficult to address effectively the current immigration crisis. First, terrorist attacks have fueled xenobia towards some groups especially arabs and muslims (Lonhi 2012). Second, the European Union’s dublin regulation which states that the first country in which asylum seekers first set foot is responsible for their asylum claim make it more a national issue rather than an European one. In other words, if refugees arrive in Italy, it automatically becomes an Italian government issue. Third, european countries that are willing to make change faced intense budget cuts causing them to prioritize their country’s economic interest instead of immigration. Nonetheless, various refugees have lost their lives in the mediterranean sea in their attempt to seek refuge in Europe. Moreover, the United Nations Refugee agency reported that the month of April has been the deadliest month on record in terms of migrant deaths. As a result, it is crucial to develop effective solutions that can help resolve this ongoing problem.

While the monetary union provided a seemingly rational model for economic stability for all member nations, this vision came to a grinding halt with the European financial crisis beginning in 2008. The Eurozone crisis began as most

In order to fight the crisis some governments within the European Union had focused on raising taxes and lowering expenditure. This raise of taxes and lowering of the governments expenditure contributed to social unrest as it is only natural the living population would much rather not pay higher taxes (Eichler, 2011). Sovereign debt had risen substantially in only a few Eurozone countries, most dramatically in countries like Greece, Ireland and Portugal. Although only a small amount of countries had a debt crisis or where on a path of having a debt crisis, it had become a perceived problem for the rest of the European union countries as the threat of further contagion was on the brink and a possible break-up of the Eurozone was in peoples thoughts. The global credit crunch in 2007/ 08 affected and exposed countries to the sovereign debt crisis. The credit crunch alludes to a sudden deficiency of trusts for giving, prompting an ensuing decrease in advances accessible. This credit crunch was constrained by a sharp climb in defaults on subprime contracts. These home loans were predominantly in America however the ensuing deficiency of stores spread all through whatever remains of the world particularly in Europe. This credit crunch led to many changes within the Eurozone, the following are some of the changes that the credit crunch caused; bank losses such as commercial European banks lost money on their exposure to bad debts in US, recession that resulted

The economic crisis within the Eurozone has grown rapidly for the past five years, and members of the European Union struggle to enact any effective measures to halt or reverse its effects. Perceived booms in the housing markets were really only bubbles which popped and sent entire national economies spiraling downward into recession. Nations of the Eurozone have accumulated massive public debts, far larger than the 60% of GDP maximum specified in the Stability and Growth Pact. In 2011, Greece’s debt reached an unbelievable 170.3% of its GDP. Economic punishments are the specified consequences for violating this regulation, but the pact has not been adequately or consistently enforced. So many states have fallen past the debt limit that

The European sovereign debt crisis, which made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties (Haidar, Jamal Ibrahim, 2012), had already badly hurt the economies in “PIIGS”, Portugal, Ireland, Italy, Greece and Spain. This financial contagion continues to spread throughout the euro area, and becomes a dangerous threat not only to European economy, but also to global economy.

What is the European Debt Crisis? The European Debt Crisis is the failure of the Euro, a currency that ties seventeen European countries together. In this paper, I will be describing the cause and effect of the debt crisis along with what would happen if the European Union stayed with the economy they have. Then what I believe is the best solution to fixing the debt crisis.