The European sovereign debt crisis that began in 2008 was a period of economic breakdown that badly affected the financial institutions of many European countries. The downfall of many European businesses and economies was the biggest challenge faced by the EU members.
The economic downturn began in Greece and soon spread to include Portugal, Ireland, Italy, and Spain (collectively known as PIIGS). The euro had plunged to an alarmingly low rate against the U.S. dollar. This threatened the stability of the euro currency and, for that matter, the existence of the EU itself.
The EU and the International Monetary Fund (IMF) intervened, and a series of efforts were undertaken in an attempt to control the spread of the crisis. German Chancellor Angela Merkel and French President Nicolas Sarkozy, who represented the two largest economies of the Eurozone, spearheaded the efforts. Rescue funds were allocated to Greece, Ireland, Portugal, Spain, and Italy.
The after-effects of the crisis and its related incidents adversely affected the political face of the ruling governments in the years that followed. Thankfully, the disturbing situation was successfully brought under check.
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