Author: Sheng Lu
Professor @ University of Delaware View all posts by Sheng Lu
Eupean Union and the Financial Crisis
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FASH455 Global Apparel & Textile Trade and Sourcing
Copyright© 2012-2023 Dr. Sheng Lu, Associate Professor, Department of Fashion & Apparel Studies, University of Delaware
FASH455 Global Apparel & Textile Trade and Sourcing 
2007 was the start of an economic recession when US banks went bankrupt due to the mortgage. After our economy started to fall we began to bring down other counties economy as well because we use to have the strongest economy. Banks in Europe also stopped lending money because so many banks went bankrupt. The cause for the economy to crash has all been due to banks and the government being in so much debt. Europe handled the situation by having a strong monitor on debt and loans. There on now limits on debt and deficits. Banks are becoming better capitalize forming a capital union. EU and national founds are going to be used to keep the currency strong and growing all across Europe. Europe has come up with great plans to turn their economy around building many Unions to control the money. In order for the economy to get better the banks and government need to have a better control over the money and how it is invested making sure loans will be payed back. Once the banks become strong so will the Economy.
I thought it was interesting how they referred to the Eurozone as interdependent. It is noticeable because once Greece started to collapse, the other countries needed to pull their resources to help them. And as a result the entire E.U. started to suffer. If another country in the U.S. faced the same bankruptcy issues as Greece, than the E.U. wouldn’t have the resources to bail them out. That is why it is essential for them to place stronger rules on debt. It could lead to a collapse of the E.U. which doesn’t only effect the Eurozone, but it effects everyone. It effects other countries because of trade, and the value of the Euro. The Euro would be worth close to nothing. People would stop spending. Therefore, it is essential for the E.U. to solve the crisis before it gets worse. I liked the idea of the structural deficits being limited to .5% of GDP, I think this could help a lot.
While it’s nice that Europe is working to help its people recover from their financial situation, I’m not sure it was entirely necessary to begin the video by blaming all of this on the US. The video is about the financial situation in Europe, not in the US. It was obnoxious that they began the video by blaming the US for their own situation. I found it interesting that countries in the Eurozone are so interdependent and that when one country prospers, other countries using the Euro benefit as well. I didn’t realize that this happened before watching this video. I think that the plans being set in place by the European Union will work, particularly the limits that are to be set on debts and deficits. This will prevent debts from being spread to other European nations when one nation is suffering.
When Greece financial problems arose they received a bailout from the European union. As a result the E.U is now in debt. I too agree that the limits on debts and deficit will help prevent more debts in the near future. From personal experience i could really see how the European Union is interdependent. When i was living in Cyprus, Cyprus had bought greek bonds which was a factor in cyprus current financial crisis.
the video in a way blames all the financial issues of other countries on the US. The issues Europe is facing can be related to us but the blame is in many ways being put on us when we cant control everything that happens in Europe. I find it bizarre especially when we don’t even use the same form of money and the financial status’s related to one another have always been different.
Over the last year I have heard over and over again how the European Union and the collaspe in Greece are going to inturn affect the United States which would turn into yet another financial crisis. Not only would it effect us but it would effect all the countries in the European Union cause a financial breakdown. I really enjoyed seeing a visual of how they plan to turn everything around so in the end everyone succeeds. They created stronger rules so each country will not spend beyound their means. This is especially important. I also think it is important that the tax payers are not fully responsible if a bank goes down. They also have a great 2020 rule to increase innovation, production, and jobs to restore economic growth.
Katy how would you mind expanding on how their financial crisis in Europe could affect the US?
I thought this video was very unfair at the beginning. They seemed to blame a lot of the financial situation that Europe is in on America. I have learned a lot about the Eurozone in my economics classes and never once did any teacher bring up that the US could be to blame for it. Although the US is currently in a recession, I do not think it was fair. Greece had a lot of problems with their financial state and received a bailout form the European union. This was necessary to do because once one country in the Eurozone is doing well on euro, all of the other countries do as well. Greece was and is still suffering a lot and the European union is trying to prevent this from happening the best way they can. They are doing this by putting limits on debt will be beneficial. I predict the European Union will prosper and become a lot more successful in the future!
This video seems to be blaming the US for the European financial crisis. It is interesting how different countries are affected by eachother. Wars in certain countries raise the rate of their exports because it is harder for then to get through. I think the financial crisis is driven by greed.