Difference between revisions of "The Blame Game"

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==The scenario==
==The scenario==
[[Image:No_EU.jpg|thumb|right|600px]]  
[[Image:No_EU.jpg|thumb|right|600px]]  
The year is 2030 and the European Union is only a shadow of its glorious past. The region is still feeling the impact of the 2009 financial crisis which led to a depression in Europe.


The year is 2030 and the European Union is only a shadow of its glorious past.  Looking back just over 20 years, it is clear that the financial crisis which hit the world in 2008 had its most profound effect on Europe. <br/>
The billions of Euro pumped into the financial market by the richer nations, helped the economy to stabilize in the beginning and it showed signs of recovery. But, the recovery was long drawn and the rich nations were not able to sustain the financial flow and started withdrawing the money released, to divert it to other economic requirements. After all, each country had its own problems to cop with.
<br/>
 
By the middle of 2009, the countries in the EU had realized that the only way to stop a complete financial meltdown was to pump in billions of Euros into both the financial and real economies. It had become necessary for the government to save drowning companies by injecting huge amounts of capital in return for large stakes of the company. The idea at this early stage was that the government would sell back their equity as the market started to recover and the companies paid off their loans. However, no one at that stage realized that the worst was yet to come.<br/>
The EU was also unable to sustain subsidising the lesser developed member states. This caused wide spent resentments among member nations. With rising unemployment levels and falling standards of living, member nations turned their focus inward and adopted more socialistic practices.
<br/>
 
In 2010, after showing some early signs of recovery the economy took a nose dive again in what was described by many economists as the "Double Dip". The billions of euros which had been pumped into the economy showed no signs of being recovered and the strain could be seen on the balance sheets of the all the major economies of the Union. Under pressure from their citizens, the governments of the richer nations such as Germany & France, started to pull back their investments from other countries such as Eastern Europe, Asia & Africa. After all, each country had its own problems to cope with. There was a growing sense of gloom and despair as unemployment continued to rise to unimaginable levels throughout Europe. <br/>
People started re-looking at their identity. Till that time they believed in a unified EU, but as the EU was not able to keep the ship afloat, richer members considered the option of being the first to part ways so that they could be able to serve their people better.
<br/>
 
By 2012, the effects of the economic crisis were still deeply visible throughout the union. The downward trend had flattened out but millions of jobs had been lost. The huge numbers of unemployed started to feel a large amount of resentment at the large number of immigrants within their countries. They blamed them for the lack of jobs and there was a noticeable shift in the mindset of the people with more and more people sharing conservative ideas about closing down borders to immigration and tightening laws for offshoring and outsourcing. This started to cause wide spent resentments among the poorer member nations. <br/>
That was the beginning of the disintegration.
<br/>
Elections in the countries of the EU started to show a rise of left wing parties pushing a more socialist agenda. They blamed the capitalist way for the crisis and came to the conclusion that the socialism with its ideals of equality and fairness was a much better concept. The huge government equities in major companies were leveraged to enforce new labor laws. Protectionism was the flag raised by political parties to receive enough votes in order to remain in the power.
<br/>
Socialism started to take a strong hold in Europe with almost all countries being governed by left wing governments. Socialist governments started to blame each other for the economic slowdown. For Example: the French and Germans blamed English banks for the crisis.
<br/>
The crisis had also effected countries in several degrees. Many governments wanted to regain control of their monetary policies to devalue their currencies in order to improve exports and provide a much needed stimulus to their economies. The presence of a unified currency was thus seen as a roadblock to progress by many governments and some countries started to talk about giving up the Euro and going back to national currencies.<br\>
<br/>
The growth of socialism also led most countries to focus primarily on their own national agenda, thus ignoring worldwide issues like climate change, green technology, poverty reduction, and conflict resolutions.  
<br/>
The lack of new investments in renewable source of energy led to a growing dependence by most EU countries on Russians resources. Some members developed good relationship with the Russians while others were against the high level of dependence. The difference of interests were becoming bigger among the members.<br/> 
<br/>
People started re-looking at their identity. Till that time they believed in a unified EU, but as the EU was not able to keep the ship afloat, richer members considered the option of being the first to part ways so that they could be able to serve their people better.That was the beginning of the desintegration.<br/>


== Timeline ==
== Timeline ==

Revision as of 19:40, 13 October 2009

The scenario

No EU.jpg

The year is 2030 and the European Union is only a shadow of its glorious past. The region is still feeling the impact of the 2009 financial crisis which led to a depression in Europe.

The billions of Euro pumped into the financial market by the richer nations, helped the economy to stabilize in the beginning and it showed signs of recovery. But, the recovery was long drawn and the rich nations were not able to sustain the financial flow and started withdrawing the money released, to divert it to other economic requirements. After all, each country had its own problems to cop with.

The EU was also unable to sustain subsidising the lesser developed member states. This caused wide spent resentments among member nations. With rising unemployment levels and falling standards of living, member nations turned their focus inward and adopted more socialistic practices.

People started re-looking at their identity. Till that time they believed in a unified EU, but as the EU was not able to keep the ship afloat, richer members considered the option of being the first to part ways so that they could be able to serve their people better.

That was the beginning of the disintegration.

Timeline

Period of 2010 - 2015

The bottom of the credit crisis seemed to stay behind in the end of 2009. Small signs of economic recovery were improving citizen confidence for the following years. The news about other countries that had recovered such as China, Australia and Brazil were fullfiling of hope the population in Europe. However, the prevision of economists were predicting a stronger hit in the economy of major developed coutries. Unfotunately, they were right. The bubble burst again in the beggining of 2011.

Regulations in the financial sector weren't enough to contain a second and fatal collapse of major banks. Government had to inject huge amount of money in financial institutions to guarantee their deposits. Unemployment rose up to 20% in Spain and the UK.

The pessimim and panic spread out throughout Europe and a felling of uncertainty regarding the future explained several actions taken by individuals and governments to protect themselves. With the lack of confidence in the financial sector people started to withdraw their money from the banks. The bank run required immediate intervention from government, but promises that government would guarantee people's deposits did not stop individuals' wiliness to hold their money during the new turmoil. Meanwhile, companies not only stoped investing in new projects but also started divesting their assets. Prices went down rapidly. Consumption decreased. The economic meltdown was lasting longer than expectations and signs of recovery did not seem to appear in a near future.

New politic parties came up with different types of reforms and proposals. People did not believe in the capitalit way of life anymore. Left wing parties started gaining power and support from voters.

Period of 2015 - 2020

Period of 2020 - 2025

Period of 2025 - 2030

Background Information

Recession

Reactive

Inward

Socialism

Restricted

Break Up

Conclusion

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