Greek Financial Crisis
The financial crisis in Greece began in 2008, but still exists today. When Wall Street imploded, Greece announced that they had been underestimating their shortage of money for many years. Greece had been shut out from the ability to borrow in the financial markets, causing Greece to begin to veer towards bankruptcy. The threat of this new financial crisis caused the International Monetary Fund, the European Bank, and the European Commission gave the first bailout funds to Greece, but these funds came to Greece with conditions. There were many steep budget cuts and tax increases as effects of the funds. Even now with the funds to Greece, the economy has shrunk, causing unemployment and the inability to fully pay off the debts.
Spanish Financial Crisis
In July 2012, Spain had an unemployment rate of 20%, its stock market was at an extreme low, and the Spanish government was borrowing at a rate of 7.6%. Domestic demand was depleted and there were no hints of recovery causing Spain to need three main reforms to recover: financial market reforms, fiscal measures, and labor market reforms. After these three reforms had taken effect in Spain, the exports from Spain increased by 4%. The recovery of Spain’s economy was a largely export-driven. There are many factors that could undo the recovery, such as threats to the Rajoy administration and Spain’s main competitors: France and Italy.
Italian Economic Crisis
Beginning in 1999, Italy adopted the euro, but the Italian economy’s competitiveness and economic growth has decreased. Since 2008 Italy has experienced a “triple dip recession”. Italy’s GDP has decreased 6% and their unemployment rate increased 11%, according to aei.org. Causes of this economic crisis for Italy may be their large national debt, low productivity, and the government. Italy has the second largest debt in Europe and corruption and weak rule of law is common. A major effect of this economic crisis is on the Eurozone. The Italian economy is one of the largest in Europe and this could create many issues for the EU and Europe as a whole.