European Financial Crisis

The European crisis is not exclusive to just European countries; it affects the United States as well. Their economy is bigger than that of this country, and if it fails, the pain it will bring to us will be similar to the problems that we created for them back in 2008 (Frum, 2011). They can lose their power to pay back debts owed to United States creditors which will further impair the already damaged United States economy. Furthermore, as a whole Europe represents this country’s largest trader. If American exports to Europe decrease, the financial system will suffer. This country needs to grasp that if the euro crashes, each European country will need to re-establish its own currency. The United States has faced problems like this before with France and Italy (Frum, 2011).

In June 2012, Federal Reserve Chairman Ben Benarke remarked, “The crisis in Europe has affected the U.S. Economy by acting as a drag on exports,” and went on to say that it became a weight on the confidence of businesses and consumers alike (Filatriau, 2012). It is pressure for the US markets and financial institutions. The problem is serious to U.S. unemployment as well as USA Today reported earlier this summer that 7.1 million U.S. jobs were tied into the European export business which is hardly something a country with an unemployment rate over 8% can afford to stand at this point (Filatriau, 2012).

Filatriau, J. (2012, June 10). How the European financial crisis affects you – USATODAY.com. News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. Retrieved September 18, 2012, from http://www.usatoday.com/news/opinion/editorials/story/2012-06-10/euro-Europe-financial-crisis/55502256/1

Frum, D. (2012, November 17). Why the euro crisis is an American problem - CNN.com. CNN.com - Breaking News, U.S., World, Weather, Entertainment & Video News. Retrieved September 18, 2012, from http://www.cnn.com/2011/11/14/opinion/frum-euro-american-problem/index.html