Eurozone Crisis Make up Comment by Francis Joseph Chu

Hi Sir,

Here are my thoughts on the Eurozone financial crisis.

Recently Standard and Poor (S&P) downgraded two of the few countries in the world who had a Triple A rating.  This was a shock as well as a big blow to the European economy since one of the countries downgraded was looked upon as a benchmark by other countries.  What is the meaning of this?  Because of these countries' debt, their economic standing has also suffered.  With the exception of Germany, all throughout Europe, economies have come crashing down.  Even if Europe is thousands of miles away, it does not mean that the Philippines will not be impacted by the financial crisis going on there.

The primary victims here would be the people who invested their hard-earned money in these economies.  My dad being one of these people, he was forced by the crisis to pull out and reinvest in other opportunities mostly in Singapore.  Other investors who invested heavily in the Euro would be forced to sell at a loss or just invest in the German economy.  For the local people, there is a possibility that they go through a similar situation that the United States is going through like high inflation and high prices of even basic goods to name a few.  For OFWs this situation could mean a decrease in the need of overseas workers since locals would be out of a job.  This in effect would decrease the amount of dollars that the millions of OFWs remit in our country.  These same people might also be forced to just come home even if they know that there is no job waiting here for them.

Assuming that this crisis follows the same trend as that of the United States, homes would decrease in value drastically.  Many might be foreclosed and most would be sold at a loss.  Prices would surely skyrocket thus making it harder for Europeans to get the same value for their money as before.

A colleague who works as a financial advisor in the bank sums it all up in the presentation he showed to our Citigold clients.  He showed an illustration of several statues labeled France, Austria and Greece falling down much like dominoes and a man labeled Germany struggling to push back the statues in an upright position.  This particular picture says a thousand words basically being that with the exception of Germany, the European economy is crashing down and the German economy try as it might, may not be enough to put it all back together again. 3

Francis Joseph Chu

"The key to immortality is first living a life worth remembering."