European Union

Written by Marcin Szczepanski with Eulalia Claros,

© mbolina / Fotolia

The financial crisis began with the collapse of Lehman Brothers, starting a worldwide chain reaction. The EU economy contracted for five consecutive quarters, with growth returning only in the second half of 2009. Stimulatory and fiscal actions by national governments and the EU, and the Eurosystem’s loose monetary policy, helped achieve recovery. It was short-lived, however, as in 2010 a sovereign debt crisis resulted from a loss of financial market confidence, with soaring public debt. Yields on government bonds, particularly in the periphery countries, rose dramatically. Ad hoc rescue devices, such as the European Financial Stabilisation Mechanism, brought the situation under control, later supported by the pledge of European Central Bank President Mario Draghi to do ‘whatever it takes’ to save the euro. The acute phase of the crisis ended in 2014, followed by a period of extremely low inflation and weak growth. To boost inflation, facilitate bank lending and stimulate the economy, the Eurosystem relied increasingly on quantitative easing. While 2017 was the EU’s best year since the crises, with economic performance returning to pre-crisis levels, recent data suggest that the momentum is weakening, both in and outside the EU.

Read the complete briefing on ‘A decade on from the financial crisis: Key data‘ in the Think Tank pages of the European Parliament.

Small nuclear reactors can help “vulnerable nations take control of their destinies,” the US energy secretary said in Brussels today (21 October), claiming that small off-grid nuclear plants can bring electricity to poor nations and “disperse the darkness” around the globe.

It is perhaps fitting that a Brexit process that has made a celebrity out of House of Commons Speaker John Bercow should end with a final procedural fight to the death.

Slovak authorities, on Monday, charged an important businessman and three others with murder over the killing of the 27-year old journalist Ján Kuciak and his fiancee last year. According to the Guardian, a fifth man confessed to participating in the plan, facilitating the killing. However, he made a plea deal with prosecutors to act as a witness in the trial of the other four.

Turkish president Recep Tayyip Erdogan on Monday accused Western countries of "standing by terrorists" as they failed to support Turkey's operation against Syrian Kurdish fighters. "Can you imagine the whole West stood by the terrorists and all attacked us, including Nato member states and European Union countries?", Erdogan said in Istanbul. Turkey announced a 120-hour suspension of the offensive following a deal with US vice-president Mike Pence on Thursday.

About 300 migrants in Malta took control of part of one compound, set five cars on fire, and lightly injured a policeman on Sunday night, reported the Times of Malta. A police spokesman said the situation was brought back under control early on Monday. The riot in the so-called 'Tent Village' reportedly started when one of the residents was not allowed to enter for being drunk.

Spain's acting prime minister, Pedro Sanchez, was in Barcelona on Monday to visit the police injured during recent independence protests, he tweeted. In a letter sent to the president of Catalonia, Quim Torra, Sanchez accused him of "turning his back" on security forces and the anti-independence half of the population there. Replying to Sanchez's letter, Torra asked for "dialogue without conditions", after Sanchez refused to speak with him this weekend.

Russian president Vladimir Putin said on Monday Russia wanted to help African leaders without "political or other conditions" such as those established by Western countries, Reuters writes. "[Western countries] are try[ing] to return lost influence and dominance in their former colonies in a new guise and rushing to pump out maximum profits and to exploit the continent," he said before the first ever Russia-Africa summit on 23 and 24 October.

By blocking accession talks with North Macedonia and Albania, French president Emmanuel Macron is siding with illiberals.

Russian Prime Minister Dmitry Medvedev reiterated Moscow's support for Serbia during a visit to Belgrade on Saturday (19 October) and announced the signing of a free trade agreement between Serbia and the Russian-led Eurasian Economic Union (EAEU).

Written by Marcin Szczepanski,

© doidam10 / Fotolia

It has been a decade since the financial crisis erupted and changed the world in 2008. Few at the time guessed what would be its magnitude and long-term consequences. The interconnectedness of the economy and the financial sector facilitated the spread of the crisis from the United States to Europe. First, the EU faced the Great Recession in the 2008-2009 period and then, after a short recovery, several Member States succumbed to the sovereign debt crisis. The combined crises had catastrophic consequences for economic growth, investment, employment and the fiscal position of many Member States. The EU engaged in short-term ‘fire-fighting’ measures such as bailouts to save banks and help stressed sovereigns, while at the same time reforming the inadequate framework. While signs of moderate recovery showed in 2014, the risk of falling into deflation or secular stagnation remained high, and it was only in 2017 that the EU economy returned to a state similar to that of before the crisis. The signs in 2019 are not so promising however.

Many efforts have been made to improve resilience in the EU and the euro area. These have included improving the stability of the financial sector, strengthening economic governance, creating a safety net for sovereigns in distress and carrying out structural reforms, particularly in the countries most affected. In addition, the European Central Bank (ECB) has taken unconventional policy measures. Nonetheless many argue that the pace of the reforms has slowed down considerably since 2013 when the economic situation began to improve.

The legacy of the crisis is still present and many challenges persist. These include the absence of a clear and agreed vision for the future of economic and monetary union (EMU), perennial macroeconomic imbalances and high public deficits in a number of Member States, and the ongoing risk of a doom loop between sovereigns and the banking sector. Post crisis vulnerabilities also include rising inequalities, youth unemployment and high in-work poverty risk levels.

See also our infographic, A decade on from the financial crisis: Key data.

Read the complete briefing on ‘A decade on from the start of the crisis: Main responses and remaining challenges‘ in the Think Tank pages of the European Parliament.

In an interview with EURACTIV Croatia, German Federal Economy Minister Peter Altmaier spoke about the forthcoming EU presidencies of Croatia and Germany, the controversial zero growth ('Schwarze Null'), and the cooperation with the Western Balkan states.

Turkish President Recep Tayyip Erdogan on Monday (21 October) lashed out at Western states, accusing them of "standing by terrorists" in failing to support Turkey's operation against Syrian Kurdish fighters.

Europe is prepared to step up its response to unfair trade practices and push for a renewed WTO, aiming to display a more assertive stance towards its partners in the future.

The European Parliament's LUX Film Prize promotes European films and showcases their diversity.

Source : © European Union, 2019 - EP

Ensuring sustainable growth for the EU implies moving from a 'take-make-dispose' model towards a model where resources are used in an environmentally and economically sustainable way.

This Monday, the British parliament may reach a decision on Brexit agreement between the UK and the EU after the House of Commons postponed the vote on Saturday. Prime Minister Boris Johnson, who promised that Britain would leave by October 31, has now been forced to ask the EU to extend the Brexit deadline. Commentators attempt to unravel the events.