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History of the Eurozone Financial Crisis
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Eurozone Financial Crisis
There are a number of factors that contributed to Europe's debt crisis. One of the initial factors was the heavy losses incurred by many European banks who had invested heavily in the American mortgage market. The losses were triggered by the downturn of the US economy, which caused numerous homeowners to default on their mortgages.
Many EU governments provided aid in an attempt to save these European banks but the cost proved to be too high. For instance, in Ireland, it had almost bankrupted the government. This, in turn, caused Europe to slip into recession in 2009 and for investors to closely scrutinise the finances of various EU governments. The threat of bank failures meant that the health of government finances became more important than ever.