With severe economic troubles brewing in Europe, particularly in Greece, Romania, Spain, Portugal and Ireland, the future of the European Union and its single Euro currency is coming to question by many lead economists opens in a new window. This is the EU’s and the Euro’s first real test and so far key decision makers are equivocating! Should you change your global strategy?
Will Europe’s economy survive the crisis? At what cost? Will states secede from the Union? Or will they break away from the Euro? Will the EU organize a bailout? Can healthier EU countries afford a solution? Will the struggling countries create a permanent drag on the EU shaping the prospect of a long term recession in Europe or possibly worldwide?
With the lack of leadership and determination in Europe akin to Abraham Lincoln’s, there is a real threat that Greece’s and other countries’ economic troubles will lead to the breakup of the Euro and even the EU. Europe’s inability to act to rescue debt-defaulting states can also risk bringing Europe and the rest of the world into another massive economic crisis, as big if not bigger than the one the world recently suffered in 2008.
Unlike 2008, we are seeing entire countries, not just Fortune 500 companies, clamoring to avoid bankruptcies. Will the world watch them fall, when sequential bailouts were put in place before to rescue banks, investment houses, insurance companies and car manufacturers?
These are definitely concerning times that executives in global companies that depend on European markets for a healthy chunk of their business should not overlook.
Impact on Your Global Strategy
But today’s concern should not create reluctance on companies seeking to go global to put off their international expansion plans and pull back focus to local markets only. International business and globalization trends and momentum will not stop. All perhaps you need is a bit of readjustment and a lot of currency hedging!
In short, wait a bit, adjust a bit, and avoid throwing the baby out with the bathwater.
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