When Lehman Brothers filed for bankruptcy on 15 September 2008, it was the fourth-largest investment bank in the United States. Its bankruptcy played a decisive role in the outbreak of the financial crisis, which quickly spread to other continents.



Decade of debt and despair



In Europe, it turned into a banking and sovereign debt crisis, with many governments finding it necessary to increase taxes and cut spending to reduce deficits. The EU experienced its worst recession of its history.



In the euro zone, public debt is now much higher than 10 years ago. In Greece it increased to 178.6% of the gross domestic product in 2017 (compared to 103.1% in 2007) , 98.3% in Spain in 2017 (35.6% in 2007) as well as reaching 131.8% in Italy in 2017 (99.8% in 2007).



In response to the crisis, the EU institutions and the member states took some major steps to contain it and preserve the integrity of the euro zone.



The banking union, for example, aims to provide stronger requirements for banks with the supervision placed at European level and ensures that every individual deposit up to €100,000 is protected. The EU also created the European Semester to discuss and coordinate economic policies at national and EU level, ensuring a closer supervision of national budgets, while paying greater attention to debt levels.



Investment in the EU fell drastically during the crisis due to low investor confidence. The Juncker Plan, or Investment Plan for Europe, was established to increase the amount of investment by removing obstacles and barriers for investment. The capital markets union was also set up in order for businesses to raise cash on capital markets, rather than being solely dependent on loans from banks.



Not over yet



French ALDE member Jean Arthuis, chair of the Parliament’s budget committee, called the banking union “a major improvement”, but said the euro zone's governance still wasn't good enough to meet economic and social challenges: “A single monetary policy requires an economic policy transcending national egoisms."



The effects of the crisis are still being felt in some EU countries. Greece exited its last bailout programme just a month ago and the current unemployment rate in Greece stands at 19.5%. Youth unemployment also remains high: 39.7% in Greece, 33.4% in Spain and 30.8% in Italy.