Europe's Economy:

From Beginning to End

 History

Europe didn't always have an economy that was in a downward economic recession. In Europe's early years the economy thrived and the industry was booming. Many people are looking back to Europe's history to see where this country took a wrong turn and how Europe became a place of economic failure.

In the 17^th century Europe had a large improvement in their agricultural output and during this same time Europe was entering the "Price Revolution". The "Price Revolution"was a series of economic events where high inflation rates characterized Western Europe. The Industrial Revolution began in England during the 18^th century. During the Industrial Revolution the production of goods was transferred from small homes and businesses into large factories. Machines then began to take over the jobs that were once done by man and this revolution created some of the world's first developed countries (a country with a good economy, industry, high Gross Domestic Product, and exceptional education system and standard of living). And soon after, in the 19^th century, the Industrial Revolution began to spread outside of England. Now, Europe had a prosperous economy that was the most powerful in the world. Because of the revolution nearly all of Europe was industrial and modernized.

Later, in the 20^th century Europe experienced major economic growth and prosperity as well as more industrial growth. This growth seemed to cause rivalries between countries and states and soon became the foundation for two World Wars. Countries were always arguing and fighting and soon, Europe ran dry on many important resources. Their industries began to slow from the lack of resources and the economy soon had to compete with the growing economy overseas.

Slowly, in 1945 through 1990, many Western European governments moved toward linking their economies and in 1958 France, Belgium, Germany, Italy, Luxembourg, and the Netherlands created the European Economic Community (EEU). This allowed free trade among the countries and created a common market (a group of countries that acts as a single market with no trade barriers between the countries). This soon developed into the European Union. Europe soon got over their conflicts and started taking larger and larger steps to a large economy. In 1993 Spain, Portugal, Ireland, United Kingdom, Denmark, and Greece joined the European Union (EU). At this point the goals of the EU were to create jobs, protect citizen's rights, and preserve their economy and environment. Manufacturing became important to Europe's economy but was soon shadowed by the growth of the service sector of their economy. The manufacturing that took place in Europe represented "great regional distinction" in their economy. Currently, there are 25 members of the EU :Ireland, Belgium, Denmark, Italy, Latvia, Hungary, Portugal, Netherlands, Sweden, Czech Republic, Slovenia, United Kingdom, Spain, Germany, Lithuania, Estonia, Slovakia, Cyprus, France, Poland, Malta, Luxembourg, Finland, Austria, and Greece. Together these countries dominated over the rest of Europe's economy but, since these countries are "interlinked" when the economy started to fail, all were affected.

Current State 

The current state of Europe's economy is "underwater".  The economy is having troubles.  Every single day and night citizens are becoming worried.  Many find themselves staying awake at night wondering how their stocks are doing, or, how am I going to find money to pay the bills?  This is not normal for an economy to be this bad.  But in today's world it is reality. 

Europe is currently facing many economic crashes.  Some, in particular, being the housing crisis, rising prices on necessary items, plummiting stock markets and currency values, and rising unemployment rates.  The euro has been struggling to keep a constant, reasonable rate.  Many of the European banks are facing bailouts and are not quite sure what to do now.  Banks generally feel as if they have done all they can do. These linked events are deciding the future of this continents economy, which was once the most powerful on the globe.  The current generation of citizens are finding that fact hard to believe because they have only known the economy to be in in a downward spiral.

Another issue is the European Union.  The European Union is wanting to try to expand their borders but in these times are finding such a task nearly impossible.  Many believe that expanding the European Union is the way to begin to end this crisis.  But, can they find the money right now to do it?  That is the problem.  No one is quite sure about any other solutions to this crisis and that is a problem itself.  Nobody has a clue what to do about this down surge of events.  The only thing the people can do right now is wait until the government finds an idea that will solve this.  Lets just hope this comes soon.

Industry

Europe is a continent with a large and prosperous industry of everything from agriculture to trade and manufacturing.  The industries of Europe are the main supports of the economy and keep pushing it through tough times like these.  One of Europe's main goals is to create a better life for the people and Europe's industry plays a big role in this goal.

The main land uses found in Europe are commercial and subsistence farming, commercial fishing, forestry, frade and manufacturing, and herding.  Commercial farming is mainly found in the rivers and valleys of the Northern European Plain and in Western Europe but are scattered around all of Europe.  Commercial farming is when the farm produces products to sell.  These large farms produce large cash crops, such as wheat.  In Eastern Europe, the poorest region of Europe, there are many small subsistence farms.  These farms grow and produce only enough products to support their families.  These small subsistence farms don't sell their crops for profit at stores or local markets.  Commercial fishing is found in nealy all the bodies of water in Europe.  In the Scandinavian Region commercial fishing is an industry that is busy all year long and hardly ever stops because the water doesn't freeze over.  In the taiga (a coniferous forest covering areas just South from the Arctic Circle) forests of the Scandinavian Region, and in  the Middle and Northern European regions  forestry is the main industrial activity.  Trade and Manufacturing, the industry in Europe where majority of their money, is made is mainly found along the coasts of Europe and in some of the mainlands.  In Russia the manufacturing industry has dramatically grown and at the same time it has improved.  This industry could be larger many Russians are sticking to traditional ways of accomplishing tasks and don't feel that machines and technology are the way to get things done. This is keeping the industry from growing larger. Finally, herding is found in the Northern Tundra areas.  People herd mainly reindeer and from them they get a meat and hides to sell.

The main resources in Europe are coal, natural gas, precious metals (copper, gold, silver), hydroelectric power, iron, oil, and uranium.  Coal, a very common resource in Europe, is found in Great Britain and in the Northern and Eastern Regions.  One-third of the world's coal mines are found in Siberia.  Natural gas, a fossil fuel in the gaseous state, is found in the North Sea and in the mainlands.  Natural gas is mainly mined in the North Sea area and is sold around the world.  The few precious metals (gold, copper, and silver) of Europe are found and mined in the Southeastern Region and many large mines are found in Siberia.  Hydroelectric power is very important in Russia.  Many dams on major rivers generate Russia's main form of energy. 

   Currency

The Euro is the main currency of Europe. 16 countries are included in the Eurozone (area of countries in Europe with the Euro as their main currency) and more are soon to come. But the big question is, will that switch to using the Euro help or hinder their economy? At this point in time that answer would be hinder, for the Euro is at a two and a half year low and is still , generally speaking, dropping in value.

The first coins and notes became available in 2002 and at that point the Euro was worth its established value. When the Euro was first introduced countries from all over the world wanted the Euro as their currency. Country after country began to submit their desire for the new currency to the European Union. Not all countries were accepted to use the currency, only the countries that fit the guidelines were officially chosen to use the Euro. But, when Europe's economy began to fail and enter the beginning of an economic crash, the value of once high-sailing eruo started to fall to never-before-seen lows.

The dropping of the Euro's value is said to be linked to many sources. Some say that it is dropping because of the overall sense that Europe's economy is failing. The drop in value could also be caused by low interest rates and the insecure stock markets of Europe that are going through crashes. There is also a noticeable link with the British pound or sterling. The pound has been facing even lower values than the Euro and whenever the pound's value plunges downward the Euro seems to follow. This is most likely because of the "domino effect". This is because if something goes wrong in one economy it affects another (for explanation see the Global Economy Introduction). As of September 2008, the Euro lost 11% of its value while the inflation rates rose to 4% and the Gross Domestic Product had a major decrease.

Although the overall value is falling, during the week of March 18, 2009, the Euro rose in value. This is said to be becuase the central banks are increasing the amount of money in circulation, or in use. Even though it seems that the value of the Euro is rising, this increase could spell disaster for the economy of Europe. According to Paul de Grawe, a professer at the Catholic University of Leuven in Belgium, "If the Euro keeps rising it will be really grim news for the Euro economy, which is already in bad shape."

It may seem obvious to some that the Euro is falling in value but José Manuel Barroso, the European Commission President, is not yet convinced. Bartroso is crediting the Euro for low inflation rates, low interest rates, greater price stability, and creating 16 million jobs. Barroso also thinks that the Euro is shielding mambers from greater economic turmoil. But, according to the facts, the Euro is rapidly losing value and generally creating a worse economic crisis.

 The Value of One Euro in Other Currencies

 Future

What is next for the economy?  This is a question in the front of many European citizens heads and the unfortunate thing is the future is a little cloudy.  Many aren't quite sure if the future will clear into a stronger, world-wide economic leader or if it will fall into a bottomless pit of neverending crisis.  It seems as though the future is a combination of the two.  The future of this economy is said to get better, but only once it has gone through some troubles, it seems to be following the saying, "It has to get worse before it can get better".

Many economic experts are saying that major challenges lie ahead for Euorpe, economically speaking, some of them being as large as a near economic shutdown or skyrocketing forclosure rates.  Many also predict tensions between countries due to the unequal balence of economic value.  This will most likely call for greater competitions. 

The main challenge lying ahead for Europe's economy is the increasing age of citizens.  According to theage.com.au one-third of European citizens are expected to be of the age 65 or older by 2050.  This will call for more nursing home workers and will cause retirement figures to go through the roof.  This will make the government lower the required working age and bump back the retirement age.  This increase will cause the economy to come even closer to failing.  Pensions and healthcare will rise to inevitable levels.  Fortunately Europe's government has taken this expected number into consideration.  They are not quite sure how to solve it but believe the solution is in immigration.  This will bring in large amounts of younger-aged workers.  If Europe can solve this crisis, then they will most likely succeed in the near future.

So, when the challenges are fought and won in Europe will grow and hopefully become a strong, economic force to the world.  According to globalchange.com, if all goes as planned this step forword will create an "economic, political, and military force posing challenges to the world".  In the future the European Union will expand to other European countries and soon will include all the countries of Europe.  This large expansion will cost money to make possible but this is one risk that Europe is willing to take.  Europe will work toward equal wages for workers as well as lowering those high unemployment rates.  The economy can expect growing Gross Domestic Products and energy efficient programs.  These programs will cut back the usages of fossil fuels and "hopefully" increase Europe's industry.  But, the only thing hindering this huge future step, is the now.  Whatever occurs in the next few years will greatly decide Europe's economic future.