In 2015 the economics of Europe will decrease

The main reasons of a rather unexpected deceleration in economic growth are determined by the relatively slack world economic trends and the increased foreign-policy tension around Ukraine and the Near East. EU has a tendency to neglect the expansion of a so-called ‘sanction war’ with Russia, while it becomes obvious that it turned to be a serious blow to the economic situation in a number of small States of the EU, and, at the same time, for the largest country of an international group – Germany – the deterioration in relations with Russia may have adverse consequences. For example, as a result of the only one imposition of Russian sanction responses against food commodities 0-code exports (according to the Standard International Trade Classification) from Ireland to Russia have dropped 5.7 times, from Denmark – fourfold, from Cyprus – 3.6 times. The leaders in the food commodities – Poland and Lithuania – have a more than twofold fall of the index, however, even these two countries export to Russia less than one fifth of 0-code goods.

Closing up of trade turnover with Russia and Ukraine in 2015 will have a considerably negative influence, still it won`t be critical for general development of the EU. Taking into account general weight of Russia in EU turnover and its trade significance for the EU after the USA and China, one can hardly suppose the escalation of the ‘sanction war’, which in addition will be able to send the economics of the most dependent from Russia EU countries into a downward spiral. For example, the neighboring to Russia Lithuania have no more than one fifth of its trade turnover with our country, since its main partners are from the EU.

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How the economy affects the war and the war affects the economy

War – it is a very complex phenomenon, which is associated with all aspects of public life. War has no connection with politics, ideology, law, morality, economy. An act of violence, the process of armed exposure to one entity to another – this is the essence of war. War is last argument with the contradictions of the two sides.

economy
economy

The economy is a material factor in determining the course and outcome of the war in general. This can be seen in the world and local wars that took place in the history of human civilization. The economy and the war have relationship and specific features at each stage of development of society.

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Europe is dissatisfied with Greece and the debt of the financial crisis in its economy

18 finance ministers of the European Union have provided time for France and Italy until March 2015. By that time, countries should strengthen their budgets. In March 2015 a decision about the new loans to Greece will be accepted as well. At this time, it is decided whether Greece wants to receive financial assistance from the Eurozone.

financial crisis
financial crisis

In October, the Greek government announced that does not want to help. However, the country has not been able to solve the problem independently. Greece is in deep financial crisis.

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What currency becomes main after World Financial Crisis?

The most important question today is the question: whether there can be a dollar the main world alternate currency? The important consequence of the World War II became fixing of rates of leading currencies. World alternate currency became dollar. In relation to dollar rates of other currencies have been fixed.

World Financial Crisis
World Financial Crisis

If necessary exchange rates decreased. If in the state lack of the balance of payments was formed, the rate should go down. Export became favorable. The foreign goods became dearer. Such policy was favorable after war.

Fixation of exchange rates have stopped in 1971. The United States did not pleasant, that any state could use devaluation. The United States have demanded transition to the floating exchange rate. Now the currency market charged price to currency. The dollar has had an opportunity to decrease, as other currencies.

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A debt crisis in Europe

In Europe, begins a major financial crisis. The weakest lenders may go bankrupt. Banks will be a big loss. A debt crisis in Europe deepens.

Prospects and potential of the financial sector today is limited. There are many shortcomings in the structure. The crisis in Europe has frozen public offering. Earnings and population decline.

A debt crisis in Europe
A debt crisis in Europe

Analysts report that it is necessary to carry out the recapitalization of European banks.

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Sanctions against Russia will lead to a strengthening of the Global Economic Crisis in Europe and America

The European Union, the USA, Canada and a number of other countries have declared introduction of sanctions. What it is a sanction? These are visa restrictions, business restrictions and fixation of actives.

Organisation for Economic Co-operation and Development and sanctions

The Russian economy
The Russian economy

Organisation for Economic Co-operation and Development has stopped making process in Russia. The organization said the strengthening of cooperation with Ukraine. Organisation for Economic Co-operation and Development, OECD, is the international economic organization of democratic development.

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Why the global crisis is in the economy?

Economic cycle (the second name of business crisis) has a phase. Economists identify four phases that have different price levels, employment of workers, the rate of interest and the volume of production.

global crisis
global crisis

The first phase is a global crisis. Periodic global crisis demonstrates the reduction of production and the rate of economic development. Reduced production of goods and products. Massive bankruptcies occur in industrial and commercial enterprises. Production can not sell all the goods produced. Unemployment is rising rapidly. Wages reduced. Credit connection crumble. Securities market ceases to be stable. Stock prices are falling.

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Globalization and the global economic crisis

Billions of people around the world have benefited from globalization. The most important benefit – it’s economic growth in the country. Globalization makes higher performance and spread of modern technology. Globalization reduces the number of international conflicts. During globalization can benefit any country, if they take advantage of the opportunities offered.

economic crisis
Globalization and the global economic crisis

However, in the age of globalization, there are big risks – the global economic crisis. The globalization of the countries affected by the uneven economic development.

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The main features of the global economic crisis

1. 1825. The struggle for independence in Latin America. Capital inflows from England. The opening of new mines, gold and silver designs. Stimulation of the London Stock Exchange. In October 1825 there was a stock market crash. Beginning of the banking panic that has spread to the European continent and Latin America. Began bankruptcy and defaults. Roll over loans became impossible.

global crisis
global crisis

2. 1836-1838. An outflow of capital in the United States. His reason was the poor harvest in England. There has been a boom in the US market of cotton plantations. Reduced foreign exchange reserves. In December 1836 there was a stock market crash. The financial crisis took place in Paris. In New York started to panic.

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