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Financial Analysis: The European Crisis is over, Growth has resumed and we can now relax about the viability of the Euro Area Discuss and evaluate this statement - Essay Example

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The actual financial crisis was started in the year 2007 in the USA when over optimistic banks of the united states declares the insolvent…
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Financial Analysis: The European Crisis is over, Growth has resumed and we can now relax about the viability of the Euro Area Discuss and evaluate this statement
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"Financial Analysis: The European Crisis is over, Growth has resumed and we can now relax about the viability of the Euro Area Discuss and evaluate this statement"

Download file to see previous pages The European govt. lent 4.5 trillion euros which 375 of the entire European Union’s GDP and the EU also launched a recovery programe to save the employment levels, to support economic investment and to upgrade the social protection levels. Thus the EU govt. tried to prevent the bank from collapse and European savings were protected. In this way euro was able to maintain its value and the countries in the euro zone was protected from the adverse effect of recession in USA. But the effort had gone to vein as because the money by which EU were supporting the companies were borrowed and as a result since the early 2009 most of the countries started to face problems related to the repayment of debt. This had brought a new turning point in the crisis and raised the sovereign debt crisis. With the constant increment in the debt levels, market lost confidence in some countries and the market thought that it would not possible for them to repay the debt. Interest rate for the bonds of those countries became undependable and the problem mostly affected those countries which was sharing euro as their common currency. The banks started to reduce their lending in private houses and businesses and as a result in 2009 the economy of EU had suffered the worst recession. But it started to take a short recovery in 2011 but then again in 2012, it had faced a mild recession again. The recession started to affect all the countries in the euro zone and it reduced the employment level and increased the level of poverty. The another main reason for euro zone crisis was the economy in euro zone was very much dependent to each other, and as a result if one prospects then other get the benefit and if one suffers then other also suffer. Thus because of the interdependencies euro zone started to face recession.
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