In the end of 2008, bad news concerning job losses, recession, insolvency… were every day broadcasted by the media. People had to think about changing their lifestyles, because it was one of the biggest economic crises of the last 100 years.
The economic crisis has its origins in the United States of America banking institutions. As it happened in 1929, amonumental Stock Exchange crash had been caused. In fact, during the years preceding the crisis, American and world financial institutes really made banker’s draft easier for people and institutions by lending money to people who were incapable of refunding their debts. For example, these people bought houses that they couldn’t afford. Some banks were strongly touched by a huge amount of loansthat weren’t reimbursed and caused them financial difficulties.
Nevertheless, why is it worldwide? What are the consequences in France and in the world? How does the government tried to face this crisis? What will be the situation in 2011, when I want to find a job?
Actually, with the market globalization, almost all countries keep some international relations. The United States represent ahuge exportation market with several countries in the world. When the US has less money, they limit their spending which result in less sales and factories idle. Indeed, some products are manufactured in China, others are exported to Germany, in Europe or elsewhere in others regions in the world. Thus, when something goes wrong somewhere, especially in the US which is economically powerful, a lot ofcountries are directly affected. Moreover, I really think that the media and Internet participated in the rapid dissemination of information in the world. By dint of hearing that things are getting worse everywhere, people tighten their belt and buy less to anticipate the turbulence and the possible loss of their jobs. By buying less, they spend less which leaves little opportunities forproduction companies to get out of the crisis.
Nowadays, the crisis is still felt; some financial institutions are still in difficulties. Banks have increased the guarantees they demanded, and credit is increasingly scarce.
We can’t speak about a declining growth or a negative growth but we have to say that the world is in a recession. The first six months of 2009, the production fell by around2.5% in France for example.
Auto-production, traditionally an important element of growth in industrialized countries, is still decreasing.
The housing crisis is also very important: declining sales and falling prices (this has not only drawbacks because the price had already increased on speculative). However, the difficulty of finding an apartment is more than ever a reality. Countries thatgot developed without the homeownership restraint, like Spain or the USA, are currently in big trouble.
Moreover, the number of job losses is very important. It is about 300 000 jobs in France and nearly 3 000 000 in the USA. Unemployment is rising. The current treads leads to 9.1% in September 2009; it means an increase of over 20% of the number of unemployed since the beginning of the lastyear.
The purchase power decreases, despite an inflation rate close to zero, because of rising unemployment and under-activity, and the precautionary saving trend. Accordingly, the inequalities are still strong.
The main speech about the crisis is “the parenthesis”. But the French President Nicolas Sarkozy said that “the biggest error would be to see, in the crisis, only a bracket, and aftereverything could be started as before”. Indeed, it is obvious that we must require a profound transformation.
Moreover, the European Union seems to be disunited in this situation. However, it doesn’t change anything about its politic: countries prefer competition rather than industrial policy, free trade rather than protectionism and trading rather than the general interest.
In fact, I...