Yet another example of financial entwinement between the various western countries is the influence of European budget cuts on US economy. US which is still unable to recover from its own ever present blows of debts and financial setbacks, is struggling against the situation with the help of legal and professional debt relief programs, but cannot help getting affected by the dynamism of financial strategies that Europe employs for its own sake. A rift between the US and the EU is already growing with Britain announcing its steepest cost and budget cuts and Germany defending the idea of its own austerity measures, followed by President Barack Obama warning that such a high budget-slashing could threaten the global fiscal recovery.

The US economy felt the shock waves as European and German government made clear statements about its extreme budget cut backs in the form of government spending which provoked Obama to write a letter to the world leaders warning against excessive spending cuts. This implies that, in order to tame the deficit, the British budget aims to sharply reduce record public debt. This means that shoppers will pay higher sales taxes and the wealthy people will pay higher capital gains taxes while banks will be charged a new levy on profits; a move already approved by France and Germany. This economic stagnation in Europe will hurt US by crimping its export market on which US economy depends to a great extent, as America is trying to limp out of its own slump. Moreover, the already ruined US economy which is moving at a snail’s pace will have a negative effect on it. This particular European strategy is going to reduce the options of new jobs in America. It is a known fact that European debt crisis had a profound effect on US and global stocks and on top of this, this spending cuts in Europe will further lead the American and global customers to cut off their expenses in anticipation of another recession. With German and France stating clearly about their recent pans about spending cuts and austerity, American economy and its export and import markets are going to get hampered, since the two European states being the export powerhouses for US.

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