The United States shares deep cultural ties with Europe, going back well over 200 years. We have shared many common practices over the years, particularly in manufacturing and in technology.
One major difference that stands out though, is in our being more entrepreneurial and Europe being more regulated in their business practices. Tight regulations and Europe's inability to solve it's growing economic problems has, in turn, created problems for America.
America has been hit hard where it hurts the most, in job growth and manufacturing. It has become such a big concern that President Obama on Friday called on Congress to enact a jobs bill.
Europe accounts for more than 21% of all U.S. exports, and for over 7.1 million jobs. We're talking about jobs in tourism, technology, food and apparel. Stop and think of the number of companies in Virginia, or Richmond that are owned by European investors.
The biggest concern in this country today is the possible default by several nations, and the knowledge that their banks are not prepared for it. This is in contrast to what happened in this country in 2008.
When this country was facing financial crisis in 2008, the government and the Federal Reserve were able to keep us from financial meltdown with sound fiscal practices and planning. We were able to weather the worst of the storm.
Europe, on the other hand has been decentralized, and because of this, banks were never forced to retain enough capital for emergencies, as banks in the U.S. had done. This has caused them to jump from crisis to crisis, using stop-gap measures.
Federal Reserve chairman, Ben Bernanke, told Congress last week that the European economy has put a drag on U.S. exports. This has created a decline in customer and business confidence and has put added pressure on our financial institutions and markets.
Many people don't realize how much our financial systems are intertwined. From crisis to crisis in Europe, so goes our stock market, up and down. The question on many people's minds today is how much longer will this go on?
The biggest disadvantage facing Europe today is the common currency being shared by the 17 countries in the Eurozone. Over 330 million people use the same currency. This many countries, with different governments can cause chaos.
The lack of a common government that would add stability is the greatest obstacle facing the Eurozone. In order to make any policy changes regarding the common currency, there has to be unanimous consent.
Simple answers will be hard to come by. At best, we will continue to see our economy drag along toward recovery, or at worst, we will see a break-up of the Eurozone, along with a financial meltdown.