European House Price Essay Example | Topics and Well Written Essays - 4250 words

European House Price - Essay Example The paper tells about the recession, which took shape in the USA in 2008 and shook the whole world. The European economy followed the same principles like that of the US. The banks in Germany, the biggest economy in the European zone, offered loans to subprime people much like that of the US and suffered the consequences. The subprime people were unable to pay the loans and the economy was engulfed in recession. The recession had a tremendous effect on the European economy as a whole. The inflation culminated to a record high and the global turmoil resulted in the loss of jobs and closure of organizations. During the second quarter of 2008, the growth of the European economy contracted to 0.2%, which is the worst in the history after the EU was created. This was in sharp contrast to the first quarter of the year when the European economy had a growth rate of 0.7%. Why did the economy suffer such a setback? This was mainly due to the bad performance of Germany whose economy suffered f or the first time in four years. England experienced rise in the inflation rate and slow growth of the economy. In fact, all the countries over the continent of Europe were plagued by the problem of inflation and low economic growth. The banks stressed on the fact that fighting inflation is their main agenda, which will help in recovering the economy. The International Monetary Fund (IMF) had predicted after the housing bubble burst in the US that the condition in the Europe is far from satisfactory. The body had predicted slow growth in the economy and rise in the inflation.