The current eurozone crisis is having a heavy impact on the global economy, and in light of largely negative media coverage you could be forgiven for thinking that there was little room for any tangible optimism. With so many European Union (EU) nations facing financial meltdown and the emerging markets also suffering from diminished economic growth within the eurozone, the general perception is that the deepening financial crisis will continue to wreak havoc throughout the world.
Crisis often breeds opportunity, however, and this statement is never more relevant than when it is applied to the global economy. It is highly unlikely that there will be a shortage of nations in a position to benefit from a weak European Union, especially among those that are located outside of this jurisdiction and retain their own independent currencies. So which nations can thrive on a weak EU and use the financial crisis that has enveloped Western Europe to their advantage?
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The UK: Retaining Its Financial Independence
The exact role of the United Kingdom in the European Union remains a subject of significant debate, as while the island nation has played a central role in shaping policy and legislation, it has also refused to adopt the euro as its primary currency. This controversy resurfaced recently, in the wake of a statement made by outspoken Brussels bureaucrat Jose Manuel Barroso. In a thinly-veiled attack on the U.K., he claimed that the nation had a narrow-minded mentality and had only emerged as an influential country on the back of being a part of the largest integrated market in the world.
This outburst came as a response to the renewed speculation that the U.K. may depart from the EU, as it seeks to maximize the relative strength of the pound and embrace sovereignty as a way of developing long-term financial freedom. Certain statistics suggest that the European Union is continuing to weaken considerably, with Western Europe's share of the global GDP having fallen from 36 to 26% during a 37-year period between 1974 to 2011. With further disputes over bank capital laws also creating a significant split among EU states, the U.K. could well find itself prospering from the general economic malaise.
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Germany: The Leading European Economy
If you were to follow German media coverage of the deepening eurozone crisis, you could be forgiven for thinking that the nation has developed a rather aggressive and mistrustful attitude toward its European counterparts. This can be traced, in part, to the perception that Germany has been entirely blameless for the economic issues that have engulfed the EU, while there is also a sense that the nation's reluctant role as financial savior may ultimately lead to its own economy suffering considerably as a consequence.
It would be wrong to consider the financial aid packages offered to Ireland, Portugal and Greece as being purely benevolent handouts, however, as they are in fact bilateral and secured loans that have been heavily negotiated in favor of the German economy. The interest rates included as part of the initial loan agreements and repayment schedules are significant, and ensure that Germany as a nation will ultimately profit financially from the prolonged economic austerity of the EU.
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U.S.: How the Dollar and Investors Can Benefit from the Eurozone Crisis
The merits of a single European currency have been debated for a considerable period of time, as its supposed benefits are not shared equally among the 17 member nations. That said, it was not until recently that the euro began suffering significant depreciation, as the U.S. dollar regained strength in the wake of the United States' own financial crisis. Now that the U.S. has resumed its place as the world's reserve currency, however, investors are flooding back to their first choice of currency market.
In addition to this, the strengthening real estate market in U.S. coastal regions, such as Miami, suggests that American investors are keen to commit their capital to property. With the eurozone crisis and diminishing value of the single currency simultaneously driving down property prices in attractive tourist destinations such as Spain, Greece and Italy, there is ample opportunity for these investors to lay the foundations for significant and long-term financial returns.
The Bottom Line
This potential investment could also hold significant benefits for EU nations, which proves the age-old theory that even the most pronounced financial crisis can create opportunities for certain parties. That said, the immediate future of the eurozone looks bleak, especially with leading business and political influences in countries such as the U.K. and Italy championing a separation from the European Union. With such divisive factions creating a sizable split throughout Europe, it is likely that a number of nations will make a break for independence in the near future.