2010 Economy in Retrospect

There are many words we could use to describe the year 2010… some say it’s the year that recovery began after recession, others claim that it only looked like an improvement…but one thing we can know for sure is that the events that happened in 2010 will set a platform for next year.

So in order to have any predictions for the brand new 2011, we should first go over…what happened in 2010 in terms of the economy? Obviously, there were many things going on everywhere around the world, and to describe everything, I would probably have to write an entire book, so I will concentrate more on the highlights of the year, and why these moments were the most important in terms of economy.

There are hopes that 2011 will see relative economic growth

So what were we seeing in the beginning of 2010? Early on last year, it looked like hiring and consumer spending was finally going up, however already by spring we could see that Europe had debt troubles. This was particularly important in such countries such as Greece, with a debt of $236 billion, Italy with a debt of $1.4 trillion, Ireland owing a total of $876 billion, Spain owing $1.1 trillion and Portugal with $286 billion, according to a graphic study published in the New York Times in May of last year. So the numbers were not exactly looking very optimistic.

So severe debt was one problem we had to encounter in the economy of the past year. Another problem we should touch upon in this area is the unemployment rate, which was also another important thing that should be looked at in terms of economic crisis. According to the United States Bureau of Labor statistics, the unemployment rate in the United States was 9.80% in November 2010. According to the same statistics, in the same month, 1,586 mass layoff actions affected 152,816 workers.  That’s a lot of people without work, and that just in the United States!  As for the European Union in this case, the average rate of unemployment in the region was 9.7, according to European Union statistics, which is pretty much close to the level of the United States. This is, again, not looking very hopeful.

 And since we have begun on the European Union, I would like to get a little more into the so-called “black hole” of the European economy, Greece.  Although the European Union and the International Monetary Fund have been increasing efforts to help the financially crippled zone, it still has much to deal with. There were several reasons why Greece in particular was hit so hard. It had to do with unrestrained spending, cheap lending and failure to conduct timely appropriate financial reforms, according to a study published by CNN. Now the country’s debt is actually bigger than the national economy! According to recent statistics, it is about €300 billion ($413.6 billion).

By looking at this picture, we can see that in the “western hemisphere”, the picture is not too bright. However 2010 was also a year of changes, and a time when East met the west.  If in the West, all we were talking about was crisis, unemployment and debt; in the East, we could at least say that there was “much less crisis, and lower levels of unemployment and more loaning and investment”. Perhaps, this is approximately what the picture looks like.  While the United States and Europe are struggling, emerging economies are continuing to emerge.  Last year, China invested millions to help out Greek, Spanish and other downgraded government debt, as well as ports, highways and industries in troubled countries on Europe. The Chinese company Costco invested about $4.1 billion to open a useful gateway for Chinese goods headed for Southern European markets.  The company plans to change Piraeus, Athens’ port on the Aegean Sea, into a regional entry hub for Chinese goods and commodities.  And this is only one example of investment; and according to economists, this will be a continuing trend going into 2011.

One of the main predictions for the New Year is that emerging market stocks will soar. So in the future, we must look to the emerging markets, because in the light of the financial crisis, they are the ones where the economy is developing in a new direction.

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