The Economic Crisis surfaced in early 2008 in almost all countries of the world. It was provoked by the conjunction of different factors: the financial crisis, which started in 2007, the big rise of the price of raw materials (especially oil and agricultural products). The United States entered recession in December 2007, as some European countries in 2008-2009.

The bankruptcy of Lehman Brothers in autumn 2008 only aggravated the situation.

The first origins of the crisis were the exceedent in liquidity. Five years beforehand, the FED (Federal Reserve Bank) was directed by Allan Greespan. This man was responsible for a high surplus of worldwide liquidity, which provoked a decrease in world trade and an explosion on the price of exchange such as housing and stock market, but also in far too high investments, which led to the debt of American housings. Insurance banks had speculated into the stock market, and when the banks they insured needed their money, it was gone. This started a worldwide domino effect. Banks had no more money, so people and companies in America lost money. Americans that had invested in banks for a house didn’t have the money to pay the house so they were left in the streets.

Since people had less money, the demand of goods fell and there was a massive unemployment rate (8.5% of unemployment in the US in late 2008). And this resulted into the fail of banks in Europe, and the same effect happened but less massively.

The price of housing highly increased in developed countries. In five years, their value had passed from 30 trillion dollars to 70 trillion dollars. The countries in which this took place had a negative effect on their construction sector.

The financial crisis was a factor that led to the economic crisis and its propagation, due to the liquidity crisis and to the decrease of stock market and housing exchange. The economy of every country is attained by a more or less pronounced way as the reduction of the economic increase and the increase of unemployment rates. We can see different phases: the subprime crisis and the autumn 2008 crisis.

The subprime crisis started in summer 2007, due to the weakening of mortgage banks and lends to the Americans, which led to a major difficulty in American financial institutions. Banks who were having major problems were either helped (like AIG), either bought by another company (like Bear Stearns by JP Morgan Chase), or were left bankrupt (like Lehman Brothers). In a first lap of time, central banks injected massive liquidity into the stock exchange.

The autumn 2008 crisis was an aggravation of the current financial crisis, and was partly provoked by the bankrupt of Lehman Brothers on September 15th. To try and save the economic system, the governments initiated plans to save and support banks (the most important one being the Paulson plan). But this is not enough to restabilize the banks, which have a new phase of difficulties in January 2009. The American government makes new plans: a “Financial Stability Trust” which consolidates the banks, a “Consumer and Business Lending Initiative” to reload lends to consumers and small enterprises, and finally funds to avoid further housing seizure. The FED and the American Treasury will finance this.

The last factor of the economic crisis is the raise of prices of raw materials, which have sustained a boom after 2000. These increases are explained by speculation. Speculators took refuge in the commerce of raw materials, which amplified the boost. In January 2008, the price of an oil barrel went over 100$. These high prices resulted in a decrease of demand aggravated by the crisis, which caused a very high decrease of prices: at the end of 2008, the price of an oil barrel went under 35$.

In November 2008, the OCDE estimated that the member countries (Euro zone, US and Japan) would have a negative growth in 2009 and would suffer an increase in unemployment that would go from 34 million in autumn to 42 million in 2010. This crisis also showed that any slowing down in Europe and America would be transmitted to the other countries in the world. The crisis also decreased the raw material market, which affected some countries such as Russia.

The most affected countries by the crisis are the US, Hungary, Spain, Ireland, Island, Luxembourg, the UK and Turkey.

New economically rebooting plans are being announced.