The Financial & Economic Crisis of 2008 and the World Trade

The Financial & Economic Crisis of 2008-2009 is considered by many the most severe and persistent crisis since the Great Depression. What started as a crisis in the sub-prime mortgage US market, soon developed into an International banking crisis, followed by a global economic downturn. The result was the decline of Global output and the 'collapse' of International trade. The Global Economy had to face a different reality and a huge challenge to overcome. Nowadays, in theory we are in a more advanced position relative to past trade theories but there is still room for improvement. The EMU formation had significant impact in the EU Economy and changed its position on the global stage. However, in 2008, the situation changed rapidly and the global GDP decreased considerably while the world trade collapsed. Two years later, trade recovered fast unlike the world output. Unfortunately, the existing rules of the WTO and the EU did not prevent to a large extent the introduction of protectionist measures and now reforms are needed to create benefits for all countries. The EU has set an ambitious trade strategy for the future and it remains to be seen whether we can achieve our goals.