European Union member states on recovery from 2008 economic crisis

Economic and financial crisis of 2008 became a major test for the EU and for Economic and Monetary Union. Recession in Europe was more profound than in the United States. On the eve of the crisis there was no clear strategy for economic development in the European Union, and instruments of macroeconomic regulation were weak. European countries, emphasizing attention more on internal problems at the initial stage of the crisis, had not demonstrated a desire to coordinate or carry out any general steps. But later, during the world economic crisis, some countries of the EU made joint efforts both to prevent crisis and its consequences, carefully analyzing the causes and developing recommendations and new solutions. With the development of anti-crisis policy, the EU demonstrated clearly the Anglo-Saxon and continental models. The Anglo-Saxon model included the state's impact on the financial sector including nationalization of troubled banks. In the continental model there were two approaches: 1) a powerful government intervention in industry for economic recovery (French), 2) more restrained attitude of the state (German). After the deepening of the financial crisis in the spring of 2010, it became increasingly clear that significant changes are required for the EMU management structure, that EMU cannot function effectively. So it was necessary to reform the European financial system and labour relations. Accession of new members significantly affected the functioning of the European Union. It primarily concerned the expanded euro zone and, first of all, the differentiation of the participating countries. Therefore, the adoption of ten members, and then another two without a proper reform of the organization as a whole could well lead to difficulties or to paralyze all further work. To put an end to projections concerning the further fall of euro and the collapse of the euro zone, to avoid the situation that had arisen in Greece, a European stabilization mechanism was developed. n December 2010 at the Summit of European Union in Brussels member states had decided to establish a permanent stabilization fund aimed at maintaining the stability of the single European currency and national economies. The countries of euro zone set a stabilization mechanism, which could be used if necessary to ensure the stability of the euro zone as a whole, but the provision of any requested financial assistance should be subject to strict conditions. A permanent fund was to be established by June 2013.

Keywords

Authors

References