History likes to repeat itself. Not long ago we were in the middle of one of the worst financial crises, with the euro in a deep recession and Greece, Spain, and Ireland deep in debt, while the GDP of many other countries was shrinking. There's many outward signs that this recession might be returning soon, and all because of Brexit.
The 2008 recession hit practically all of the countries in the euro zone: many experienced a drop in GDP, production rates and retail sales. It was the worst recession since the introduction of the euro. To help save the economies of the nations suffering the most, there were bail-outs for Portugal, Ireland, and Spain. The European Union and the International Monetary Fund budgeted 750 billion euro in aid to help stabilize the European economy and pay off Greece's debt. If these countries actually declared the impossibility of repaying their debt, it is quite likely that the effects would be felt over a longer period and there would be a greater financial crisis than the Great Depression. Since the last recession there have been many steps taken to prevent again another such crisis. However European economies are still functioning with high debt, unemployment and slow economic growth. While unemployment has fallen from 9.5% to 9.3% and is the lowest it's been since 2009, it's still high among young people. In Greece almost half of young people under 25 are unemployed.
Great Britain may just be the cause of the next recession: Brits save very little of their earnings, they are in debt, and consumer confidence is not high. Credit Swisse analysts believe predict that the chance of a recession in the British economy is 25-38% (depending on the model used). In the first quarter of this year, the British economy rose only 0.2%, making it the slowest growing economy in all of the European Union. If this patten holds, the GDP of Great Britain will grow less than 1% this year. Another factor is Brexit: maybe corporations are looking to move their operations to other European cities, and few are eager to invest in Great Britain, as they're waiting to see how the Brexit talks will go. Then there's the weak British pound, the growth of inflation, and the decline in wage growth. This has resulted in the lowest levels of disposal income in the last seventy years. Yet if Brits stop spending, this could cause a domino effect leading to recession.
