ECONOMIC CRISIS

The Global Economic Crisis

The Global Economic Crisis

Introduction

The global financial crisis is one of the biggest issues since last few years. This disaster has touched virtually every country. Reduced profits, loss of jobs, rising prices, delayed wages, stipends, pensions and unemployment. People are just in a panic. The newspapers comprise of shocking notes that some businessman committed suicide because he could not feed his family. Unfortunately, such cases are rare.2008, financial crisis characterized by deterioration of the main economic indicators, in almost all countries of the world. The mortgage crisis in the United States appeared in 2006, which impact on the entire world countries. Then the reduction in the sale of real estate's (houses), along with this, issue has developed into a credit crisis in 2007. Credit for virtually any product can get anyone. In this paper, we will discuss the global financial crisis and how each state did to overcome this crisis (Claessens, et al., 2010, Pp. 267).

Literature Review

Global Crisis

The current international economic turmoil represents one of the most destructive economic crises in the last century, perhaps more shocking than ever. General international economic system, nearly all national economies, and especially vulnerable transition economies of Southeast Europe affected. Clearly, small and medium-sized companies particularly affected by market turbulence and its position are clearly representing the adverse economic circumstances of the newly created world (Mangir, et al., 2011, Pp. 122). The problems reflected in a reduction of demand, poor access to export markets and in capital markets that reserved for recovery of the economies that have caused the current economic crisis (Menon & Chongvilaivan, 2011, Pp. 107).

By analyzing the effects of global economic crisis, it is crystal clear that many countries were out of funds to run daily operation. Countries have to pull out funds from ongoing or future projects to sustain in the crisis. Using these approaches countries continued their ongoing projects as well as managed their operating expenses. In 2008, due to these crises, many countries had borrowed money from supra national funding agencies like EU, IMF and others.

Though these crises which have collapsed many financial sectors made European countries at the verge of bankruptcy, Latvia, Hungary and Ukraine, were on the top list. These countries have obtained a loan from EU and IMF, to maintain their reserves; especially Ukraine was out of foreign reserves and to overcome this shortage several strategies adopted. Beside theses three countries, economies of Portugal, Greece, Italy, Ireland and Spain were also facing crisis. Hungary is also in the list of loan taker of IMF in the financial crisis as its currency has lost 25% against US$, Swiss Franc and Euro. In Hungary, more than two third of its consumer credit are in Swiss Francs, and the number of obtained loans, and mortgages since December, 2008 have reportedly increased (Mohsen, et al., 2011, Pp. 101).

In order to resolve this problem, the monetary authorities and governments took a number of policy measures to prevent the crisis from spreading ...