Recap of Europe’s Financial Woes
As you are probably well aware, Europe is the latest region to face outrageous debt limits and economic woes. Within the past year, things have been taking a turn for the worst for European markets. Several European countries voted to almost double the bailout lending cap fund for struggling euro zone countries. The country that has shown signs of the most financial trouble is Greece, which is buckling from the burden of its own debt.
Many analysts and investors say even the bailout increase may be too little, too late. While boosting the bailout fund is a necessity in preventing Greece’s troubles from bringing down the rest of Europe, and perhaps, the entire global economy, it could very well fall short if Spain or Italy needs help too.
For those a little out of touch with the current European debt crisis, here’s the spark notes version.
– Primary financial woes are taking place in Greece, Ireland, Spain and Portugal.
– The eurozone country members began dealing with an economic downturn in the latter part of 2009 – about a year after the U.S. faced a harsh recession.
– The afore mentioned European countries were met with unsustainable government debts forcing the European Central Bank to help primarily Spain and Italy with funding in return for the promise that they will get their budgets in order and cut wasteful spending.
– The International Monetary Fund bailed out Greece in 2009 with a €110 billion loan ($152.6 billion), with the conditions that strict spending cuts must be implemented.
– Following Greece’s bailout, Ireland received a €85 billion rescue package in November of 2010 and Portugal received a €78 billion bail-out in May 2011.
– Several European countries are spending money they don’t have, hoping to stimulate their economies, but are finding less than appealing results.
– Arising government deficits and debt levels have affected the European stock markets for the past several months, causing millions of Europeans to lose millions of dollars.
The major global fear is if lenders from other countries don’t get their money back, other countries like the United States will end up facing serious financial trouble because each country’s economies rely on one another because they are all interconnected and globalized.
European Banks are due to repay the loans back by the end of 2012, but many speculate as to whether it’s feasible while still keeping a flourishing economy.