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The Evolution of Financial Crisis


The modern world faces numerous problems that could not but impact the state of finances and economy of various countries. Moreover, the aftermaths of the world financial crisis are still significant and slow down the pace of economic development of different regions. Besides, Europe has always been taken as one of the most stable and prosperous regions characterized by powerful industry, great incomes, and high level of well-being of its citizens. However, at the moment, Europe and the European Union also face several problems in the financial sector. In addition, the article “EU warns eight nations on budget deficit” provides the information that some of the countries of the region (specifically Spain, Portugal, Italy, Belgium, Cyprus, Finland, Lithuania, and Slovenia) might suffer from significant financial problems that will have the pernicious impact on their economies and could slow down the pace of their economic growth (EU warns eight nations on budget deficit, 2016). The importance of these processes is evidenced by the fact that the European Union is worried about the possible aftermath and insists on the necessity of certain actions to improve the situation.

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Main theme

Altogether, the given newspaper article revolves around the unexpected spending that is devoted to the development of the above-mentioned regions. These have always been considered the weakest areas characterized by the low pace of growth. However, the recent international events like the financial crisis, stagnation of the economy, and natural disasters such as the earthquakes in Italy contributed to the significant deterioration of the situation. In case the situation will be ignored, it is possible to predict the further evolution of financial crisis in these areas. That is why the main theme of this paper could be defined as the budget deficit and finances. It provides the information about the aspects that preconditioned the appearance of these problems and their becoming significant threat to the EUs budget. In this regard, the economy of these countries will be taken as the main issue analyzed and discussed within the given term paper. The possible impact on the international situation and the ways to solve the given problem might become important concerns that should be discussed.


Therefore, the topicality and the scale of the problem also result in the appearance of numerous significant subthemes that should be considered. The first is the European Unions economy. Being legitimate members of EU, Spain, Portugal, Italy, Belgium, Cyprus, Finland, Lithuania, and Slovenia also participate in the evolution of its financial and economic sectors. It means that the appearance of problems in these states budgets could not but have a certain impact on the functioning of the whole Union and distribution of funds. Another subtheme is the European Union itself. There are numerous facts that evidence the problematic character of questions related to the perspectives and possible ways of the evolution of this organization (Micallef, 2016). Adherers and opponents of this Union provide facts that could either justify its existence or prove the necessity of its dismissing. For this reason, the current economic problem could be discussed in terms of the practicability and potential outcomes of EUs further existence. These subthemes condition the wide range of assumptions that could be made when discussing the issue.

Key definitions

Besides, there are also several key definitions that should be considered when investigating the issue and revolving around the nature of the above-mentioned problem. Yet, one should understand the meaning and importance of a budget for any country and for the Union that is comprised of these countries. In this context, the term could be defined as an official statement of a government related to an amount of money that it plans to spend during a particular period of time. The importance of this document could hardly be overestimated because it conditions the evolution and functioning of numerous enterprises, important institutions, etc. Peoples prosperity will also be impacted by the peculiarities of the budget. In this regard, the budget deficit is an important factor that determines the financial health of a state. The term is used to describe the situation when a government (state) spends more than could be earned. It results in the appearance of the national debt. Finally, the budget deficit of a certain state could not but impact the state of the EU and its ability to evolve.


Altogether, when analyzing the given situation, it is possible to say that the problem in the financial sector of these states has great impact on the international relations both in Europe and in the remainder of the world. First, as stated above, countries that comprise the European Union obviously experience the impact of this problem. The EU guarantees support to all its members by providing assistance to overcome numerous problems. The recent situation in Greece could be considered good evidence to this statement. Financial problems in this state and the deficit became a great burden for member countries of the EU, especially prosperous ones like Germany, England, etc., because they had to devote great sums of money to support Greece and not let it disappear (Explaining Greece’s debt crisis, 2016). Additionally, the problem also impacts EU-U.S. relations. Being leading forces in the world, they interact with each other to influence the evolution of various aspects of the international policy (The U.S.-EU partnership, n.d). For this reason, the weakening of the position of one actor influences the behavior and policy of another. Finally, at the moment EU also opposes Russia and provides numerous sanctions to influence it. It is obvious that problems with finances will have a certain impact on these international affairs (Sherr, 2016).


EU warns eight nations on budget deficit. (2016). BBC. Web.

Explaining Greece’s debt crisis. (2016). The New York Times. Web.

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Micallef, J. (2016). Europe’s next financial crisis. Huffington Post. Web.

Sherr, J. (2016). How Russia’s relationship with Europe has evolved. BBC. Web.

The U.S.-EU partnership. (n.d.). Web.

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