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Austerity Measures after of the World Financial Crisis Essay


Nowadays, the world is suffering from the aftermath of the world financial crisis. There is a tendency in economies of all states to suffer from a decrease in incomes, reduction of GDP, and budget shortfalls. There are several reasons for such processes in the world economy. First of all, it is connected with the political crisis, which now is in its dynamic stage. The world is divided into two poles.

Western states and the USA are united against Russia, which presents the Eastern world and posts soviet powers. A great number of different sanctions are a result of this confrontation. Of course, they are connected with economies of.the states which take part in the confrontation. These sanctions disturb traditional ways of international trade, and as a result, a great number of countries suffer from the financial crisis. Moreover, the whole world is watching fluctuation of prices on the oil.

This fact also adds some tension to the world economy and the economies of different countries. That is why it becomes obvious that there is a great need in some austerity measures whose main aim is to overcome the results of the world financial crisis and guarantee the stability of the economy of different states. Especially important, these measures are for leading countries that proclaim their superiority and prevailing character. They are bearing the burden of sanctions and trying to continue their course.

With this in mind, it is interesting to analyze the financial and economic policy of the USA and countries of the eurozone, such as England, Germany, and France as they are leading countries with powerful and stable economies and compare their actions which main aim is to save the economy of these countries. First of all, there is a great need to find a solution to the problem of unemployment, especially in Europe where it is more than 20%, which is seven times higher than in the USA (“150115_001”).

With this in mind, it is possible to suggest that in Europe a great number of different actions are directed to finding a solution to this problem, while in the USA it is not so critical, though something should also be done with 7% of unemployed people. Another important issue is to solve the problem of the banking system.

There is a tendency in the world to understand that cash transfers can become a real salvation for the banking system and be very effective in fighting recessions (Blyth and Lonergan 106). In the USA, this understanding led to increase in GDP. That is why it is possible to say that it can serve as an example for countries of eurozone where the problem in the banking sphere also exists.

Moreover, a new term in the economy appeared. It is austerity. It is the policy whose main aim is to reduce public spending, debts, and deficits in this way (Blyth, “The Austerity” 41). It is a very unpopular policy that has doubtful results. It is possible to support this statement by clear evidence. France has “one of Europe’s largest budget deficits at 4.3 percent of GDP and a debt increase of 29 percentage points of GDP (63 to 92 percent debt to GDP) since the crisis” (Blyth, “When You Find Yourself” 5).

With this in mind, it is possible to say that austerity measures are not ineffective and lead to a further increase in debts and problems in the economy. The way the USA tries to fight the aftermath of the world financial crisis seems to be more beneficial.

Works Cited

Blyth, Mark. ““. Foreign Affairs. 2013. Web.

—. . 2015. Web.

Blyth, Mark and Eric Lonergan. ““. Foreign Affairs. 2014. Web.

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1. IvyPanda. "Austerity Measures after of the World Financial Crisis." May 1, 2020. https://ivypanda.com/essays/austerity-measures-after-of-the-world-financial-crisis/.


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IvyPanda. (2020) 'Austerity Measures after of the World Financial Crisis'. 1 May.

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