Eurozone: A Not So Happy 5th Anniversary For the Financial Crisis

It’s not the the best anniversary to mark but here goes: Today is the fifth anniversary of the financial crisis, the Guardian reminds us.

August 9 2007 was the day the world changed (in the words of ex-Northern Rock CEO Adam Applegarth). That was the moment that the European Central Bank and the US Federal Reserve injected $90bn (£45bn) into the financial markets, after seeing a sudden collapse of confidence.

That coordinated action (the first of many), failed to prevent the credit crunch, the collapse of the Rock, or Lehman Brothers, the world recession or the eurozone crisis.

The news from August 9, 2012, suggests we are not near to being out of the woods yet. Saying that the euro zone economy is in worse shape than it had predicted, the European Central Bank (ECB) has cut its growth forecasts for 2013 to 0.6 percent, instead of a projected 1.0 percent. The ECB also made a plea to countries to reform their economies “swiftly and decisively.”

Other news showed the extent of the challenge: The UK’s trade deficit widened to a record high because of a big drop in exports. Some analysts are pegging the UK’s “dire trade deficit” on euro zone woes. A research note from Japanese bank Nomura has brought up the possibility of a “Brexit,” of the UK leaving the euro zone.

Growth in Asia has also been slowing, with India, whose economy is the third largest in Asia, reporting that industrial production fell for the third time in four months. China’s industrial production and retail sales also fell. Inflation in China has hit a 30-month low and reignited fears of a slowdown in its economy.

In Greece, industrial production rose in June by 0.3 percent. But the unemployment rate is higher than ever, up to 23.1 percent in May (up from 22.6 percent in April), which is more than double the eurozone average (11.1 percent in May). Unemployment for those aged 15 – 24 years is now 54.9 percent. Five years ago, it was 22.8 percent.

Over here in the US, new trade data were more encouraging (certainly if you’re President Barack Obama worrying about elections in November). The US trade deficit decreased by almost 11 percent to $42.9 billion — its smallest level in two and a half years. A decline in oil prices, which lowered fuel bills, accounted for the drop in part. Also, weekly jobless claim numbers were down by 6,000 from a week ago, to 361,000, a sign that the US market may (emphasis on that “may”) be on the mend.

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Photo by chatirygirl

49 comments

John W.
John W.7 months ago

10 Reasons to Leave

Why we should leave: The top ten reasons we would be BETTER OFF OUT…

 

1.     Freedom to make stronger trade deals with other nations.  

2.     Freedom to spend UK resources presently through EU membership in the UK to the advantage of our citizens.

3.     Freedom to control our national borders.

4.     Freedom to restore Britain’s special legal system.

5.     Freedom to deregulate the EU’s costly mass of laws.

6.     Freedom to make major savings for British consumers.

7.     Freedom to improve the British economy and generate more jobs.

8.     Freedom to regenerate Britain’s fisheries.

9.     Freedom to save the NHS from EU threats to undermine it by harmonising healthcare across the EU, and to reduce welfare payments to non-UK EU citizens. 

10.   Freedom to restore British customs and traditions.

John W.
John W.7 months ago

IMMIGRATION

Britain has given away control of immigration within the EU to the EU, and retains the power only to control non-EU immigration. This has led to huge disparities where Commonwealth citizens with family in Britain struggle to obtain visas whilst EU citizens with little link with the UK can automatically work here

John W.
John W.7 months ago

TRADE

Britain pays direct ‘membership’ costs of £17.4bn, which equate to an annual net contribution of £6.7bn and dramatically rising owing to Tony Blair’s surrender of a sizeable part of the British rebate.

John W.
John W.7 months ago

JOBS

It has been happening for the past twelve years and continues to slip off the tongues of European Union supporters and spin doctors in newspaper, on television and during broadcast interviews, “3 million jobs depend upon the EU” whilst avoiding, of course, providing evidence.

John W.
John W.7 months ago

THE ECONOMY

Bernard Connolly is a renowned British Economist, well known for his negative view of the euro. He was actually one of the first insiders to start touching upon the preparations for the euro currency.

John W.
John W.7 months ago

FISHING

British fishing policy is determined by the political imperative of European integration. The objective is to create an EU fishing fleet catching EU fish in EU waters under an EU permit system controlled from Brussels.

John W.
John W.7 months ago

In an increasingly networked and interdependent world, the more successful societies are those that allow more decentralised decision making, by harnessing and balancing opposing forces. Britain’s refusal to be reconciled to being in the EU is not ultimately anything to do with flags or anthems. It’s because we know in our bones that it is a daft way to run a whole continent. I suspect it is not only the Brits who will soon be demanding the freedom to opt out.

John W.
John W.7 months ago

Put simply, Europe cannot best be organised by deliberate design. From the Common Fisheries Policy to the common currency, being part of the EU means trying to do things according to some kind of “blue print” determined by a Brussels elite. It makes things more or less bound to go wrong. Indeed, the more insulated from public accountability the Euro System has become, the more inept it is.

By withdrawing from the EU, we would make it possible to organise economic and social affairs in this country not by deliberate design from the top down, but more organically and spontaneously. From the bottom up. Instead of common financial service rules, we might instead allow competing exchanges to offer different approaches and see which one works. Rather than a Common Agricultural Policy for millions of farmers, we might, you know, allow millions of farmers to each have their own farm policy for their farm.

John W.
John W.7 months ago

7 REASONS WHY WE SHOULD LEAVE THE EU

It is not just about the Euro. Or the fact we’re having to bailout a currency we chose not to join. It is not the Euro sclerosis – the fact that the trade block we joined in the early 1970s which then accounted for 36 percent of world GDP, will account for less than 15 percent in 2020. It is not even really about the anti-democratic nature of having decisions made for you in Brussels. Today, for example, we learn that unelected and unaccountable Eurocrats want to prevent us from asking if those claiming benefits in Britain are entitled to them.

No. The reason we need to quit the EU is even more elemental than all that.

Aud Nordby
Aud nordby3 years ago

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