CW Essay Example | Topics and Well Written Essays - 500 words - 1

CW - Essay Example llow members in one way or another, especially those involved with the Euro currency and thus, the European Union has taken it upon itself to come up with measures that will successfully resolve the matter. However, to understand the issues being faced in the crisis, one has to first determine the underlying causes that were responsible for the European economic crisis in the first place. Though a number of factors can be said to have been put into play, one major cause is the poor management of the banking systems in countries such as Spain, which left them in dire need of assistance to maintain their operations and remain afloat. This occurred as a result of factors such as lenient lending policies that led to a huge number of defaulters as the economic situation worsened in these countries, meaning the banks were not able to get their money back. The recession that is being faced worldwide also played a big role in the development of the crisis as investors were no longer willing to risk delving into the market due to the fear of losses. The crisis led to a number of outcomes as various markets were affected and were not able to function sufficiently due to the lack of investments. Banks that were not able to regain their money collapsed and even the major ones stumbled as a result of the defaulters while the Euro also dropped in value as a result of people choosing to switch to more stable currencies in their business dealings. Though the UK supports the recovery of the Euro, the steps that have been taken by the European Union, such as the formation of a Single Supervisory Mechanism (SSM) for all banks, may lead to a fading influence of the UK in the Euro Zone. The development of these bodies may lead to the interests of the UK being ignored or overlooked during the voting process on various decisions as the bodies focus on what will help the member states rather than the interests of the UK. As a result, the UK has requested for financial safeguards that