Countries across the continent are struggling to find ways to cope with the growing financial crisis. From the nationalization of domestic banks to multi-billion cash injections into the capital markets, Europe's politicians, regulators, and market players are trying different approaches to deal with the mounting problems and issues that face them financially.
The ongoing global financial crisis had an adverse impact on even the most stable economies in the world; the short term bailout has proven to be contentious and met with large scale skepticism. I do agree with the statement because many countries depend on the financial stability of another and the train reaction and crumble a less stable economy to an almost unrecoverable state.
The European crisis has several remarkable perspectives. This crisis found a way into some of the most stable economies and has promoted some of the largest bailouts. I believe the catalyst was the collapse of Lehmann Brothers because of the then, unpredictable issues it created. Somewhat having the same effects of the East-Asian crisis in the early 80’s. Also I believe that the European financial world has been blindsided with varying threats of in the most alarming nature. For a country having a once stable currency and exchange rate being forced to devalue its currency stops the injection of cash and sends investors into hiding.
The US has seen some of the most stable companies collapse including large financial institutions that were accompanied by stock downturns and government bailouts. This alone was responsible for the declining numbers in consumer spending and in economic activity.
What are some remedies? Many believe that reducing government spending, some say let the countries fall into a dark depression to drive down wages and prices that SHOULD produce a trade surplus. Lastly as I stated above…make those tried and true currency devaluation.