European Union is holding another summit of all its member countries to try and find a solution to the ongoing economic crisis. The world’s largest consuming countries namely US and Japan are in doldrums and are cutting down on their imports drastically.
This has resulted in drastic cut in European exports in the last six months, and local demand destruction and value corrections are also happening very fast and quick. Thus, all the European countries have reported negative GDP growth in 2008 quarter four, and most of these countries are likely to report their worst ever economic performance for decades, for 2009 first quarter.
To complicate problems further, we can expect US and Japan to further protect their local industries through unilateral actions which might hurt EU the most.
Unable to find a solution themselves, these countries are now looking for collective thinking to get out of the economic crisis.
In the EU, already there have been few major bankruptcy cases, and most of the European countries have already spent nearly half a trillion dollar in bailing out their banks and insurance companies. One more problem for the European banks is the continuing withdrawal of funds by foreign investors due to their local issues. God only knows when the world will come out of the economic crisis.