Impacts of The European Economic Crisis Essay Example | Topics and Well Written Essays - 1000 words

Impacts of The European Economic Crisis - Essay Example Additionally, the EU recession caused an increase in the cost of doing business, since firms do not have access to credit from financial institutions. Because of this, firms will have to cut cost of investments such as research on investments. This will have a long term effect on firms and the countries involved because there is a loss in research which would have led to inventions of new technologies. Political crises have also been reported in countries affected by financial crisis, for example Greece. There have been cases of demonstrations, rioting and other social effects on the population. This is mainly attributed to the high rate of unemployed persons, high inflation and high prices of goods. This can be a long term effect because if the case of EU financial crisis is not dealt with, political and social instability will continue (Aghion & Howitt, 2006). The rate of depression among the residents of EU is also increasing because of the high rate of unemployment. This is becau se the population has lost hope for future income based on the crisis which hit their countries. This is mainly attached to the results of the crisis such as the increase in the number of poor people. This would be a long term effect because it is a continuous trend. Furthermore, other long term consequences are impacts on the populations’ health due to loss of jobs and lack of insurance cover. Research done by the Red Cross in some EU countries has shown that the EU crisis has made the governments too weak to provide important services to its citizens. This is because there is a high growth in the number of citizens demanding social services from the government. The gap between the poor and the rich is also increasing because more people...This essay is one of the best examples of comprehensive analysis of the impacts of the economic crisis on the economies of the EU countries. The EU crisis increased the rate of unemployment in most European countries. High number of workers outside the job lose their job skills because they are not practicing. The EU recession caused an increase in the cost of doing business, since firms do not have access to credit from financial institutions. Firms had to cut cost of investments such as research on investments. There is a loss in research which would have led to inventions of new technologies. Political crises have also been reported in countries affected by financial crisis, for example Greece. There have been cases of demonstrations, rioting and other social effects on the population. This is mainly attributed to the high rate of unemployed persons, high inflation and high prices of goods. This can be a long term effect because if the case of EU financial crisis is not dealt with, political and social instability will continue To solve the case of unemployment which has contributed to political instability, the EU should consider unemployment insurance. Unemployment insurance has been implemented in the United States and has done well. This act can be implemented in such a way that those who had been employed before losing their jobs qualify for unemployment insurance. The study also mentioned the loss of hope by firms and cuts on their investments due to loss of credit from financial institutions.