Europe And The Financial Crisis

In Europe, a number of major financial institutions failed. Others needed rescuing.

In Iceland, where the economy was very dependent on the finance sector, economic problems have hit them hard. The banking system virtually collapsed and the government had to borrow from the IMF and other neighbors to try and rescue the economy. In the end, public dissatisfaction at the way the government was handling the crisis meant theIceland government fell.

A number of European countries have attempted different measures (as they seemed to have failed to come up with a united response).

For example, some nations have stepped in to nationalize or in some way attempt to provide assurance for people. This may include guaranteeing 100% of people’s savings or helping broker deals between large banks to ensure there isn’t a failure.

The EU is also considering spending increases and tax cuts said to be worth €200bn over two years. The plan is supposed to help restore consumer and business confidence, shore up employment, getting the banks lending again, and promoting green technologies.

Russia’a economy is contracting sharply with many more feared to slide into poverty. One of Russia’s key exports, oil, was a reason for a recent boom, but falling prices have had a big impact and investors are withdrawing from the country.