Making Sense of the Economic Chaos in the European Union

Since 2007, the problem of the US market collapse the European banking system and trigger an unusual serious recession.Then strengthen the euro zone sovereign debt crisis.At a critical time, the EU leaders take extraordinary measures to a series of measures to stabilize the bank, and as a member of the euro into a debt crisis, providing huge financial support.What crisis left the euro zone and the European Union, it is caught in the brink of collapse, or promote greater integration of it?The reality is that neither of the above two cases have occurred.We can not foresee the future going to be like.Economic and Monetary Union has been a test of political decision-making, the one hand on the monetary policy decisions of the Member States to give up sovereignty, but on the other hand still retain the autonomy of their economic policies.

For some people advocate the integration between the European crisis and the related, but the economic crisis is a great opportunity to prove how the transfer of power to further cross-national level.In response to the economic crisis, the EU's reform has been spared, but the measure has shown that economic decision-making,It exists only in essence, that is the economic and monetary union across the country.

In May 2010, the financial market is very concerned about the public finances of other eurozone members.In order to make investors be at ease, the euro zone leaders pledged to allocate sixty billion euro, the establishment of a new European Financial Stabilization Mechanism, EFSM, to ensure a new European Financial Stability Facility, EFSF can provide four hundred forty billion euro to meet the financial needs of any euro-zone member states.December 2010, the EU agreement the transition from the European Financial Stability Fund to the European Stability Mechanism.

On August 9, 2007, the first signs of an economic crisis appeared in the EU.BNP Paribas published a press release and suspended the three investment fund transaction.However, the credit rating of poor people to provide loans, has been brewing in the market for many months, accumulated a lot of bankruptcy cases.In 2006, a sharp slowdown in the US housing market,resulting in a large number of subprime mortgage borrowers who can not repay the loan.This chaos quickly spread to the US financial industry,2007 US investment bank Bear Stearns (Bear Stearns) have announced huge losses in the subprime mortagage.

The financial crisi of 2008

BNP Paribas in the press release issued a few weeks, it is clear that the number of European banks have been severely damaged subprime lending crisis.In August 2007, Sachsen Landesbank Irish subsidiary hurry to sell a large number of subprime loans sold to Landesbank Baden-Württemberg.In the UK, the century-old Northern Rock due to problems in the financial markets and had to close down.

Banking crisis : Questions on the solutions

In March 2008, the US Federal Reserve negotiated another US investment bank JP Morgan, the US investment bank Bear Stearns to buy, because the latter has accumulated more than three billion US dollars of subprime-related losses.Meanwhile,the other US investment bank - Lehman Brothers fall in to difficulty ,and the bankrupt ended.In September, when Lehman Brothers has been involved in high-risk mortgage loans and commercial real estate activity, it will be clear, it is not only the US economic crisis, but also spread around the world.

Lehman Brothers collapse. Sep. 15, 2008. Stock Market Reactions

What is European Union?

The History of the EU

The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. The EU has developed an internal single market through a standardised system of laws that apply in all member states. EU policies aim to ensure the free movement of people, goods, services, and capital within the internal market,enact legislation in justice and home affairs, and maintain common policies on trade, agriculture,fisheries, and regional development. Within the Schengen Area, passport controls have been abolished.A monetary union was established in 1999 and came into full force in 2002, and is composed of 19 EU member states which use the euro currency.

What is EU?

Making Sense of the Economic Chaos in the European Union