A History of Western Society: Printed Page 1049
A History of Western Society, Value Edition: Printed Page 1011
A History of Western Society, Concise Edition: Printed Page 1056
While chaos and change roiled the Muslim world, economic crisis sapped growth and political unity in Europe and North America. In 2008 the United States entered a deep recession, caused by the burst of the housing boom, bank failures, and an overheated financial securities market. The U.S. government spent massive sums to recharge the economy. Banks, insurance agencies, auto companies, and financial services conglomerates received billions of dollars in federal aid. By 2016 the economy had improved and much of the housing market had recovered, though some critics claimed that income inequality was higher than ever.
The 2008 recession swept across Europe, where a housing bubble, high national deficits, and a weak bond market made the crisis particularly acute. One of the first countries affected, and one of the hardest hit, was Iceland, where the currency and banking system collapsed outright. Other countries followed — Ireland and Latvia made deep and painful cuts in government spending to balance national budgets. By 2010 Britain was deeply in debt, and Spain, Portugal, and especially Greece were close to bankruptcy.
This sudden “euro crisis” put the very existence of the Eurozone in question. The common currency grouped together countries with vastly divergent economies. Germany and France, the zone’s two strongest economies, felt pressure to provide financial support to ensure the stability of far weaker countries, including Greece and Portugal. They did so with strings attached: recipients of EU support were required to reduce deficits through austerity measures. Even so, the transfer of monies within the Eurozone angered the citizens of wealthier countries, who felt they were being asked to subsidize countries in financial difficulties of their own making. Such feelings were particularly powerful in Germany, forcing Chancellor Angela Merkel (r. 2005– ), the nation’s first woman chancellor, to move cautiously in providing financial stimulus to troubled Eurozone economies.
The difficulty dealing with the stubborn Greek debt crisis prompted debates about the viability of a single currency for nations with vastly different economies as well as widespread speculation that the Eurozone might fall apart. In 2010 and 2012 Greece received substantial bailouts from the IMF, the European Common Bank, and the European Union (the so-
The 2015 Greek elections brought the left-
Even as the Greek crisis shook European unity, in June 2016 Great Britain voted to leave the EU all together. The campaign for the “Brexit” (British exit from the EU) was intense. The narrow victory of those wanting “out” showed that many Brits did not want “Eurocrats” in Brussels intruding on national policy and did not appreciate the EU’s relatively open immigration policies. Prime Minister David Cameron (r. 2010–2016) resigned immediately. Though Britain had two years to negotiate the terms of the exit, global financial markets fell, far-