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Can Europe's Economy be Saved

Date Added: July 12, 2012 02:28:30 PM
Author: admin
Category: Regional: Europe

The combined factors affecting European finances are interconnected more than ever before. Instead of a concrete foundation of savings, prudent investment, and bonds, individual European countries have liquefying financial bearings. New World and Pacific Rim markets are feeling the effects of a shrinking currency as well as dealing fewer currency trading options. Newspaper headlines and evening news lead stories regularly feature declining European situations both politically and economically.



The mighty tradition of the Old World and its permanency has undergone a change. The likelihood of economic recovery and financial stability of Europe is unknowable. The starting point of origin of many expatriates worldwide, the face of Europe in peril has a quelling chill. But so many financial markets globally are now watching the action in Europe nervously. For the first time in centuries intelligent analysts identify Europe as a whole as a risk.


To save Europe’s economy, elaborate backhoes of financial solidarity will have to be erected. Following the classic model of a financial bailout, a network of loans and key share buyouts from core companies of a given country are necessary. This has been sufficient in the past. In fact, just the public promise of aid from other major countries is often enough to bolster public confidence. But today, foreign markets are vulnerable to the same forces affecting the host government. They are risking their own financial health in current circumstances by doing so.


In ordinary circumstances these dictums would arrest any feelings of rising panic of investors and federal and government regulators. Yet the frequency of upended European financial markets in prominent recent headlines to fail financially has constricted this aid. Nowadays both internal policy advisors and the general public are critical of their own government undertaking more debt. With a dwindling gallery of “white knights”, European financial ministers have fewer go-to options.


As with many risky financial ventures, funds are controlled by multiple advisors. Soon, European market destabilisation will be a common denominator that devalues any investment. The question shifts to what European countries are willing to put up as collateral. Member countries of the European Union may have to offer up significant national assets, such as land, valuables, or art as a monetised security. The dominance of the Big Banks, who have their own scandals and issues, can no longer be depended upon for deep pocket lending.



The international view of corporate and government lending for European country clients varies. Debt accords are only as good as the word of the interested lender. Where German debt and Spanish and Greek and Irish bailouts fluctuate, market confidence is reflected by the Euro trading at a two year low. Given that the Euro is the coin of the bailout realm, sovereign debt responsibility must be governed by still vacant office of a central debt regulator. This is true even though deficit reduction strategies abound.



Declines in national money markets interconnect with agricultural and trade volumes globally. As one player wins out, that country which is defeated becomes less equipped to bolster international debt. Senior bankers around the world are now handling their exports with an eye to publicly held debt and the restructuring of that debt in a manner that introduces foreign leverage with heightened performance expectations.

European countries will only be able to save their individual and combinedeconomies, at the cost of tens of billions of Euros per country. Yet only by adding value, investment, and networked financial planning can Europe survive. But if conciliatory debt forgiveness and debt reductions for European countries continues, the value of any rescue scenario may devalue the Euro it was founded on. Therefore only history will reveal if the European Union is an animal not fit ti fiscally survive.




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