The current economic and financial crisis is on the mind of every economist and decision-maker throughout the world. Almost against their will, they have come to terms with the fact that a global shift is happening, the outcome of a world-turned-global-and-connected, where each person and each country affects and is affected by all the others. In our new world, all of us are part of a single, global, continuously tightening network of economic, financial, and social ties—some overt, some covert.
The economic interdependence among countries prevents any one country, even those whose economy seems currently sound, like Germany, China, or Brazil, from avoiding the ramifications of the global crisis and the domino effect that brings this crisis to their doorsteps.
Thus, China is experiencing a slowdown in its growth because the chief buyers of its products—the U.S. and Europe—are under a severe crisis that affects private consumption and consumers’ standards of living.
Germany, the strongest economy in Europe, could also face hardships due to the imminent collapse of the Greek economy and the subsequent chain reaction in the PIIGS countries (Portugal, Italy, Ireland, Greece, and Spain), and in the rest of Europe.