5th Assignment: review of the European Union Policies minor

Writing this last assignment feels like a good way to do a sort of bilan about my semester of study in Breda as it’s coming to an end. I’m a French exchange student and before I arrived in Breda my only worries were about where I would live, the weather, the Dutch way of life, in other words nothing about the study.

When I had to choose which minor I would follow during my semester in Avans, I didn’t have any idea about what I wanted to do. After reading the description of the three available minors, my choice was done: I was going to study European Union Policies.

Why did I choose that minor? First of all, I don’t like finance, so the IBE minor was already out of my choices. Secondly, between Asian Trade and European Policies I felt closer to EUP since I’m myself an European citizen and I wanted to improve my knowledge about the European Union, therefore EUP was like an evidence for me.

Were my expectations fulfilled? Yes, and even more.

During those 4 months of studying EUP I had a lot of “ups” and “downs”.

The lesson I’ll never forget is the first negotiating class, we were divided in groups of 3 students representing a EU member state and we had to negotiate about one topic related to the EU as if we were real European politicians. After this class I thought: this is serious, we’re learning things that are happening right now inside the European Union and I knew that it would be interesting.

The highlight of the semester was of course the excursion. We had the chance to visit European Union institution in Brussels, Strasbourg and Luxembourg. And to talk with people who are directly linked to the EU, it was no longer about theory, but about practise, it was concrete.

In the other hands I have some “downs” I’d like to talk about.

The lessons I would rather never had is law. I hardly can follow my law classes in French so it was even worst to keep up when the class was in English. Moreover, law isn’t my favourite subject as sometimes it’s too theoretical and to be franc quite boring.

Although the minor is called European Union Policies, the content is very wide. Politics, economy, finance, law, every week we studied a different aspect of the EU. Not only the content is wide, but also the learning methods. Lectures, tutor groups, training sessions, project groups, it was totally a new way of learning for me because in my school in France we didn’t have classes such as tutor groups. Let me tell you about the tutor groups, I remember my first lesson, the professor told us about the “seven steps model” and I had no clue about what is was about. I was totally lost and it was even worst when the teacher explained us that we were going to lead the class and not him. One student would be the chairman and we would discuss the task and ask questions following the seven steps model. I thought a class without teacher how is that possible? But after 4 months of tutor groups I was looking forward to the day I’d be the chairman of the class.

After 4 months of studying this minor, my recommendations to a new student who don’t know which minor to chose would be to chose EUP. Not because this is the minor I did, but because you can’t never be bored as the topic of the lessons changes every weeks and is very wide, also like I said every class is different from the other.

In conclusion, I’ll always have a good feeling thinking about this semester in Avans, the minor was very interesting and I learnt a lot of things about the European Union. If I had to give a grade to the minor, I’ll give a 8,5/10.

4th Assignment: The government action and the credit crisis

The credit crisis, those two words have been in our mouth of quite a while, and unfortunately most of the people don’t know everything about it. I must confess I’m a part of those people as I’m not an economist. My essay will not be 100% fair and I’ll try to deal with the issue the best I can.

I chose to talk about the crisis by focusing on the government actions which lead to the crisis, and then explain what has been done during and what can be done in the future.

To understand better why the US government is responsible for the crisis we have to go back to the past and to clarify some points. We need to understand how the real estate market is working. Fear and greed are the two components of this market. Fear from the people who have to borrow money and greed from the people who land the money. The origin of the crisis is when the government has removed the necessary counterbalance of fear from the equation. This phenomenon is known as subprime crisis. Due to an increase in loan incentives, easy credit condition and thanks to easy initial terms facilities to obtain a loan, borrowers didn’t fear to assume difficult mortgages in the belief they would be able to quickly refinance at more favourable terms. That when the problem starts: interest rate became higher and at the end they weren’t able to refinance.

We all know the consequences of the crisis. The first companies touched were the mortgage companies. During 2007, at least 100 mortgage companies either shut down, suspended operations or were sold. The crisis had its peak in 2008 when several investment groups like Lehman Brother collapsed.

Then the crisis hit Europe, and brought several bank failures.

The governments tried to save some of the companies by doing bailout: but sometimes it wasn’t enough and companies would go bankrupt anyway.

Here comes the issue we’re dealing with, the crisis started by the intervention of the government in the market, so how will the crisis end up? Even if a liberalist approach seems logical, it’s quite obvious that the market can’t regulate itself in situations like these. The government has to repair its own mistakes in the financial crisis. So it must interfere in order to regulate the market and minimize the effects of the crisis. The question is how?

Governments and central banks (US and European) have been injecting money in the credit market. Indeed, these central banks purchased US$2.5 trillion of government debt and troubled private assets from banks. This was the largest liquidity injection into the credit market, and the largest monetary policy action, in world history.

We also saw case of bailouts. But are the bailouts working well? In my opinion government should give money to industries which really needs it. It will avoid bankruptcy and reduce the layoffs.

In think that the effects of the actions of the government will only be seen in a few years and not immediately.