[pic]

University of Incheon
12-1 Songdo-dong, Yeonsu-gu,
Incheon, Korea 406-840

“The Leadership of the European Union and its policies to manage the financial crisis”

Content

The World Economic and financial Crisis 2

Definition 2

Origins 2

The progress and the consequences of the global economic crisis 5

Some Important Events of 2008 7

First reaction and Stimulus plan 8

The Leadership of the European Union and its policies to manage the crisis 10

March 2009 Summit in Brussels 10

European Economic Recovery Plan 11

Cohesion Policy in the Recovery Plan 11

The World Economic and financial Crisis

Definition

An economic crisis is a rough degradation of the economic situation and the economic perspectives. An economy facing an economic crisis will most likely experience a falling GDP, a drying up of liquidity and rising/falling prices due to inflation/deflation. An economic crisis can take the form of a recession or a depression, Also called real economic crisis.

A financial crisis is a crisis which gets stock markets, and markets of the credits of a country or a group of countries. It can concern only some countries, or, introduced in a country, can extend by contagion. The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crisis were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults.

Origins

We can notice that one of the main causes is the rising of the prices of raw materials: Raw materials prices have experienced very strong growth between 2006 and 2007, resulting in increased production costs. Then we also have the