European Union Debt Essay Example | Topics and Well Written Essays - 500 words

European Union Debt - Essay ExampleThe European Union debt crisis was a fusion of complex elements in the world market. The globalization of finance and facilitation of easier access to recognise in 2002-2008 period enhanced risky lending and borrowing among the member states. Moreover, the fiscal policies, trade imbalances and proportion bubbles accelerated the dept status (Dikson, Julie, and Pavlos 30). The establishments were losing money following the banking system bailouts to defaulters of the proportion bubble. Furthermore, the pension commitments and the unsustainable public wages change magnitude the debt level (Lynn 11).The increased capital and savings in the global pool of the European Union and former(a) investors set the policy and regulatory structures in the member countries. This is because lenders and borrowers were quick to transact thus generating economic bubbles in each continent (El-Agraa 39). A decline in the monetary value resulted in significant losses and declines in property values. However, the liabilities owed to the global investors remained at constant prices resulting in major losses to the borrowers and insolvency of banks and government (Crifo 30). consort to Sanghera (21), the Northern countries, such as Norway and Sweden, were able to cope with the crisis because their governments lent capital to property developers. This generated huge property bubbles. When the bubbles collapsed, their governments and citizens assumed private debts. These reduced excessive burden to the government to bail the nation out. After somewhat time, these nations were able to retain a fair economic position with better employment percentage. In Greece, however, the government enhanced its commitment to the public employees by facilitating higher wages and pension settlements. Notably, the employment wage circuit board doubled exponentially in real terms. Moreover, the banking systems grew quickly creating enormous external