Jessica: At the remains lighting plant in Brooklyn, New York, owner David Calligeros makes lighting fixtures that he ships to customers around the world.
David Calligeros: It’s headed to London.
Jessica: Calligeros, who has about fifty employees, even has a showroom in London. But now Europe is on the edge of a recession, or when the economy gets smaller. Calligeros says this puts his business at risk.
Calligeros: We’ll definitely feel it. That’s the bottom line. If Europe is contracting or having difficulties, then it’s much more difficult to create jobs at home because we send so many products and services to Europe.
Jessica: Job concerns in the U.S. is one of the reasons why President Obama met with leaders of the European Union.
President Obama: I communicated that the United States stands ready to do our part to help them resolve this issue.
Jessica: The issue is the European debt crisis. Many European countries can’t pay back the money that they owe. In a global economy, the inability of one nation to make its debt payments has a ripple effect on the rest of the world.
So how does it affect the us? Well, a lot of products made in the U.S. are sent to Europe. For example, $523 billion worth of U.S.-made goods were exported, or shipped, abroad in the second quarter of this year. One hundred and sixteen billion went to European countries. That is 22% of our exports.
So, if Europe goes into a recession and fewer consumers are buying American products that means reduced profits for American companies
“The crisis in Europe is so serious many people fear the euro, the currency of the seventeen nations in the Euro zone, will collapse. Experts say if that happens banks would stop lending money, stock markets around the world would crash and the economies of almost every nation would take a dive.”
Jessica: The president wants Europe to take painful measures to get its finances in order. European leaders admit they need tougher policies to get their budgets under control.
“We are aiming for binding rules to ensure strong fiscal and economic discipline in our countries.”
Jessica: But as the U.S. struggles with its own debt problems, it is unclear how much it can help Europe solve the crisis.
Jessica Kumari, Channel One News.
- How does the inability of one nation to make its debt payments have a ripple effect on the rest of the world?
- What is the definition of the word ‘recession’?