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Europe is being torn apart ... the eurozone seems unlikely to fall apart in the near ... while the monetary union that was meant to unite Europe pulls it apart.
Why is Europe "falling apart"? ?
I recently discovered that the UK and Spain went back into a recession. Also, the unemployment of Spain is nearly 25% (compared to the 8.2% unemployment in the US). So, why is Europe going through so many economic troubles, while the US is not? Would anyone care to explain?Follow13 answersAnswers
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Best Answer: Pure Socialism does not work as people get non productive and risk averse.Bill Lumbergh · 4 years ago5Thumbs up4Thumbs down-
There are probably a multitude of reasons, but high energy costs are a worldwide problem that affects much of Europe as well as the U.S. European countries are interdependent to a far greater degree than the North American countries are. The economic problems in Greece have helped trigger a chain reaction.
Also, to a greater degree than most people realize, Europe has a serious problem with illegal immigration. Many countries have seen an influx of mainly Middle Eastern people who have seriously impacted their economies.
Germany has withstood the European economic problems better than most of its neighbors, but has done so largely by not becoming involved with other countries' problems. The UK is probably in better economic shape than Spain but its isolation from Europe helps. Also, the UK, with its North Sea oil production, is energy independent, where much of Europe is not.
The US is not out of the woods. Our unemployment percentage is deceptively low, because many people have stopped looking for work. We are also likely to see massive inflation in the future if our debt doesn't come under control at some point. Many economists say we are still in a recession. How bad a recession depends on where in the country one lives. -
Europe is NOT failing apart.
Some countries are failing. In Europe, we have to types of countries: small countries with small income and big countries with a lot of income.
Big countries like Germany have an enormous economic power. They can spend billions of Euros and have exports which are as high as China´s or of the U.S. (although with "only" 80 million inhabitants). However, there are also countries like Spain and Greek.
Their problem is: In good times they made a lot of "State-financed" - jobs. The money came from the European Union. They financed jobs with money they got from the bigger countries.
In the great collapse countries like Germany struggled with their own problems. The helpings were cut. The state subventioned farmers and the workers in the public companies were fired.
After that a vicious circle in this countries appeared: Due to their high spendings they had to fire people, people, who were fired are not productive, so that the income of the countries decreased, they have to fire more of their public workers ...
As a consequence the Euro is getting cheaper ( a normal process owing to the recession), a strong country (Germany) can now export more cars and its economy is booming.
(This is it for Spain and Greek)
UK has a different problem:
A strong economy should have all sectors:
Primary: Agriculture and mining
Secondary: Factories
Tertiary: banks and services
quartary: Knowledge trade
If I look at their income sources, I see primary and tertiary. That means that they factories were outsourced, because they were not rentable and people who wanted to become engineers simply got market-place-slaves.
In my opinion the south of Europe will fail apart. UK has still chance as well as France. Germany is in a great situation and other northern countries too.
Maybe there will be a North and a South Euro.
I am sorry for all grammar mistakes (English is not my mother tongue (I am from Europe))
And to all Obama-Haters, look at the northern European countries: Health-care, pensions and unemployment payments are working there with even a higher productivity than in the U.S. or China.
I think the right expression is social capitalism (for many U.S.-citizens an oxymoron). It worksSource(s): http://www.bmwi.de/BMWi/Navigation/Wirtschaft/soziale-marktwirtschaft.html
http://en.wikipedia.org/wiki/Social_market_economy
http://www.auswaertiges-amt.de/DE/Aussenpolitik/Laender/Laenderinfos/Norwegen/Wirtschaft_node.html
https://www.cia.gov/library/publications/the-world-factbook/geos/no.html
http://en.wikipedia.org/wiki/Economy_of_NorwayHarald · 4 years ago1Thumbs up2Thumbs down -
Because they followed the conservative agenda of cutting government, cutting spending by government. Less money circulation, fewer purchases, less demand, nobody hires any new employees. No new employees? Higher unemployment.
Its the vicious circle that Republicans have been trying to push here in the US. Obama/Democrats have been able to avoid it so far. If they hadn't, we'd be back in the double dip recession, just like some European countries. Thankfully, some of those conservative governments have lost credibility and are starting to look at stimulus plans.....like we had here in the US.
And we depend on Europe for our financial well being. They are important trading partners who buy a lot of items produced here in the US. If they don't get well soon, it will start to affect our own economic growth. -
They're implementing austerity policies during times of economic stress. It's possibly the most idiotic thing I've ever seen and demonstrates a disappointing misunderstanding of economic theory. And what I mean when I say they're practicing austerity is: you increase taxes, and decrease government spending. There is nothing inherently wrong with this policy; the problem is that Europe in general is implementing this policy during a RECESSION, A WEAK RECOVERY, or ANEMIC GROWTH. That's not a good thing to do and actually ends up aggravating or making worse the debt crisis. When you cut government employment and spending during a recession or weak growth, what happens is there will be a strong ripple effect on the private sector; because those very people who are unemployed because of strong cuts in public spending and public employment have no income to spend on other goods. This decrease in demand serves to further slash jobs in the private sector which will contribute to a deflationary cycle that puts an upward pressure on the unemployment rate; in other words, more and more people not having an income and not spending means more and more people at risk of losing their jobs and not spending as well. What happens when more and more people have no employment income? Tax revenue precipitously decreases; the spending they would have done on private sector goods also dramatically decreases which serves to further decrease tax revenue; thus making worse and prolonging the debt crisis and necessitating further cuts in spending to get the desired goal of balanced budget and increased confidence. Also, a major reason why Spain has a high unemployment rate is because of their dysfunctional labor market. The housing crisis they experienced was one of the worst two; it drove up unemployment rates at an accelerated rate.
LOL, it looks like we have some right wingers on here; I'd know because they attribute every problem to what they ignorantly and incorrectly call socialism. BWAHAHAHAH -
Out of control entitlements. They have reached the tipping point where more people are sitting collecting handouts than are producing...and the downward spiral will go on from there.
Liberals and socialists, who mainly run those countries, view everything from the perspective of "what would I do"...when they should view it from "what would your typical uneducated lazy bum do", because there are more of them than anything else in the world. Too many people would rather take 50 cents to do nothing than earn a dollar to work, so the entitlements have gotten out of control, and too few people left to tax and contribute back to the government coffers to finance the handouts.
"Everyone wants to live at the expense of the State. They forget that the State lives at the expense of everyone." - Frederic Bastiat -
The gig is up - They ran out of other people's money - plain & simple.
They're so broke they are implementing austerity programs - that's the end of the rope for these liberals. -
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socialism, failed social programs, nanny state, big government, spending more than dough coming in,
all the usual offenders.
They are a few years ahead of America, and when we go through their troubles it will be much worse. -
Austerity is hurting Europe to the point where the Euro could collapse.
Sunday, May 8, 2016
Is Europe falling apart?
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