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THE IMPACT OF THE FINANCIAL AND ECONOMIC CRISIS ON THE ECONOMY OF THE EUROPEAN UNION AND SLOVAKIA
Abstract
During the last decade the EU economy was hit by two economic crises. The first was the deep global financial and economic crisis in 2008. After a brief economic recovery occurred in 2012 in the European Union another, more moderate economic recession. Reason for its existence was excessive indebtedness of some euro area countries, mainly Greece, Portugal, Ireland and Spain. The debt crisis and uncertainty about the future of the European economic and monetary union was the cause of creation of the second, though less severe economic recession. Slovak economy in the pre-crisis period was characterized by high economic growth. In 2007 gross domestic product grew year on year to 10.7\%. The unemployment rate decreased to 9.6\%. This article aims to assess the impact of the global financial and economic crisis as well as the second economic recession in 2012 on the EU economy and on the economy of Slovakia. Economic performance evaluation was based on the development of basic macroeconomic indicators, notably real GDP, unemployment rate and public debt. We focused on the comparison of the development of the demand side of the economies, so domestic and external demand in the last decade. For this purpose we used statistical data from Eurostat. Based on the analysis it can be concluded that due to the global financial and economic crisis the EU economy in 2009 declined year on year by -4.4\% and the Slovak economy by -5,3\%. This at a time stopped positive development of the Slovak economy. After a brief recovery in both economies, a second recession took place in 2012 in the EU. Reason for its creation was the debt crisis and uncertainty and fears of further economic development. EU gross domestic product fell year on year by -0.4\% and in the euro area by -0.7\%. From 2015 we can expect a positive development and growth of both economies.
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