The Continuing European Economic Crisis
The European Union is a political and economic Union of European Countries that came into existence to strengthen the political and economic ties and strength of the European countries. They agreed on a common currency called the Euro and established a single market. However due to some high risk financial lending, borrowing practices by the government and sidestepping the international best practices and standards, many countries in the Euro Zone are facing sovereign debt crisis. Also the global financial crisis in 2007-08 and subsequent global recession have all hit Europe for some time now.
European economic crisis or European Sovereign Debt Crisis is the ongoing financial crisis that has hit Europe and which has been going on for some time now. The main problem in this crisis is that many countries in the Euro Zone are finding it impossible to repay their nation debt or government debt. Many countries have already been on the verge of default and there are many more countries in the euro zone that may follow suit. Countries like Greece, Ireland, Portugal and Cyprus are facing sovereign debt crisis. The most talked about has been the Greek Sovereign Debt Crisis.
Many countries have been on the verge of defaulting on their government debt. This means that most of them have reached the last minute deals with third parties to bail them out temporarily from the disaster of a government default. When the global financial crisis started Greeks main industries like tourism and shipping were badly hit. The debt increased and Greek was on the verge of a default. The Greeks needed a bailout package from the EC, ECB and the IMF. The condition that was imposed while giving the bailout was that Greece had to implement strict austerity measures which hurt the common man in Greece.
This was just the example of Greece. The problem in the European Union is many large economies in Europe are on the verge of following Greece. Already bailout packages have been given to some countries to avoid them from defaulting their loans. But austerity measures go along side every bailout package.
Lack of growth in the European countries and unemployment are causes of more spending by the government and lesser revenue generated in the economy. The better economies in Europe are bailing out the other countries in crisis by contributing to bailout plans. However this crisis in Europe is still continuing and the impact of this financial crisis is felt the world over.