The fiscal austerity measures taken in response are further weakening the prospects of growth and employment in the affected European countries and, in turn, fiscal adjustment and repair of the national balance sheet are becoming an onerous task.
The US continues to face high levels of unemployment, the consumer and business confidence remains shaken and the financial sector is still recuperating from the earlier crisis. The European Union and the US form the two largest economies in the world and are deeply inter-twined with each other even in such adversities.