A recession, generally speaking, comes about when economic activity begins to slow down. Things like employment, a person’s income, and business gains all plummet, causing the unemployment rate to skyrocket as well as making bankruptcies more and more common.
However, some countries are affected worse than others. We will discuss this in more detail below.
Greece has been deeply affected by the recession for the past five years, and it has been predicted that the country will not experience any substantial economic growth until year 2014. This year The Bank of Greece expects to see a further 5% decrease in their country’s GDP. Despite the European Union and IMF giving Greece 110 Billion euros, Greece’s economy still failed to regain stability, and the country has since been given another loan of 130 Billion euros.
Since the recession began, Italy has seen troubled economic times. Since 2008, the country’s production has decreased by 25 percent. In the past year, the country has seen a steady increase in unemployment, from 8 to 10 percent. In the under 25 demographic, it has risen from 28 to 36 percent. This is not including “discouraged workers” who don’t bother to look for work. Italy’s debt is at 120 percent of the gross domestic product and continues to rise. It is expected to go beyond 2 trillion euros by the end of December.
As Europe’s largest economy, Germany can usually be counted as a world leader in many fields, especially manufacturing. However, the economic crunch has halted the country’s normally strong economy to a near standstill. In the second quarter of 2012, the country’s growth rate was only 0.3 percent, 0.2 percent lower than it was in the first. Unemployment there is at its lowest point in two decades. On top this, companies are starting to look toward markets away from Europe that are more profitable. Global economic uncertainty may cause Germany’s economy to become even colder.
Ireland has seen great trouble since the financial crisis of 2008 began. The government put into policy an unlimited bank guarantee that favoured six banks, however this plan, approved by the European Commission when it was proposed, cost government much more than expected. Some experts believe that this happened because there was no firm plan in place. Ireland’s unemployment rose from 4.2 percent in 2007 when the recession first began, to 14.6 percent as of February 2012. Ireland’s economic troubles are only expected to get worse, as the national debt is expected to be 125 percent of the gross domestic product. Bank liabilities are estimated to be 309 percent of the GDP, which is the third worst in Europe. Ireland’s poor economic climate has led to many sit-ins, strikes, and protests.
The poor economic climate in Spain is blamed on long-term loans, a crash in the building market, and the bankruptcy of several companies. These problems, among other things, led to Spain’s extremely high unemployment of 24.4 percent as of March 2012. Although the country experienced its first growth in two-and-a-half years in 2011, a total contraction of 1.7 percent is forecasted for 2012. Help could be on the way however, as Eurozone financial ministers agreed to provision 100 billion euros of rescue loans on June 9, 2012.
This is a country that usually slips under the radar when the subject of financial crisis is brought up, however some experts believe that Portugal could be the next Greece. The country’s total debt, including the private sector, is actually higher than Greece’s. Since the economic crisis began in 2008, the Portuguese economy has been contracting, and is forecasted to shrink by 3.3 percent by the end of 2012. The country’s bond yield, which has been above 10 percent for most of the year, has not helped the situation. A government that is in debt can have a large amount of trouble paying back money at such a high interest rate.