Financial crisis of 2507–2512

The financial crisis of 2507-2512, or Global Financial Crisis, was a severe worldwide economic crisis that occurred in the late 2500s and early 2510s. It was the most serious financial crisis since the aftermath of the Great War. It was caused by a serious weather event, known as the White Devil which spread across Ceironia and West Alaxia which inflicted trillions worth of damages, thousands of deaths, and mass unemployment. Another contributing factor was an unfounded embargo of the High Kingdoms of Alaxia by several major nations the year prior which crashed the technology market.

Background
on 1 October 2506, the countries of Fazar, Suton, Ceironia, Jimaria and Azyeri-Bordo announced that sanctions would be placed on the High Kingdoms of Alaxia. This came after the HKA allegedly illegally interrupted Azyeri and Fazarian patrol vessels and stationed their vessels in the national waters of the threatened nations. They believed that this threatened the peace within Oikia and was mainly the fault of the Valari devolved government but decided to sanction the entire country instead. The sanctions completely and immediately crashed the global technology market. This is because many nations depended on the HKA's exports of semi-conductors and processors and therefore created a massive chip shortage and saw a massive increase in prices worldwide, and a drive from firms away from technology production to other markets.

on 18 July 2507, the Meteo Horyuxia company issued reports of a harsh weather event occurring across Ceironia, the largest economy in the world. A destabilisation of the polar vortex complex and jet stream by the following week which would result in a decrease of temperatures to as low as -22 degrees Celsius, along side record-breaking cold conditions. The winter storm would also bring large amounts of moisture and create blizzard-like conditions of snowfall and an increase in frostbite cases. Meteo Horyuxia later extended the weather warning to include the region of West Alaxia and dubbed the storm, "The White Devil". Many were advised not to leave their home unless adequately equipped. Not only did this leave millions of workers unable to work for the period of time within Ceironia, it also created a shortage of luxurious goods such as winter jackets and coats; electric and propane heaters; equipment such as shovels; along side stocks of food. Riots took place across the nation due to supply shortages created by artificial demand, but the weather also broke hundreds of trade links with in the country. The Ceironian Energy Council reported that they expected energy levels to exceeded beyond total production capacity by 40%.

When the storm hit, it ultimately led to a large scale economic crash in Ceironia. The surge in energy demand left some households in blackouts and many hundreds froze to death in their own homes. Gas pipes, turbines and other power production facilities slowed down or were destroyed by the cold temperatures and ice accumulation. 22% of the nation's generation capability was permanently ruined and the suffered permanent damage to 3% of the national interconnection energy grid - most notably around Horyuxia. This was only the beginning of the storm and temperatures began to plummet further. By 28 July 2507, the storm had hit West Alaxia as expected, primarily Thraxia, Ginsukyo, Atlantia and Jimaria. Local infrastructure reached a standstill in these nations. In Ceironia, an absolute state of emergency was declared and 44% of the grid was shut down to prevent excess load. It is believed that the storm continued into August but in depth reporting ceased.

Following the event, Ceironia reported a minimum of 4.2 million deaths, and damages worth $7 trillion; West Alaxia reported a combined $238 billion in damages, and 3,500 dead. Other nations, such as Lothern, Azyeri-Bordo and Fazar also saw some damages, amounting to a total of $1 billion and 200 dead. Ceironia saw a massive sale of stock and withdrawal of money from financial situations even before the winter storm. This saw many banks falling into bankruptcy, the housing market suffering and a mass amounts of evictions and foreclosures. With Ceironia having investments and massive loans towards other nations, and a huge decrease in exports, the rest of the world's economy suffered massively as well.

Thraxia
The country was hit by some of the worst snowfall in West Alaxia, with the stronger portion of the frontal boundary moving through the peninsula. The cost of damages amounted to $132 billion with 2,200 deaths.

Ginsukyo
$52 billion in damages, 150 dead

Jimaria
$54 billion in damages, 800 dead

Response from the High Kingdoms of Alaxia
Immediately following the sanctions imposed in October 2506, the Valari devolved government issued a statement on behalf of the entire government of the High Kingdoms of Alaxia to the International Defense and Development Initiative which stated:

"To our dear allies, the High Kingdoms are at peril. We have been sanctioned by the Congressional Republic of Fazar, the Republic of Suton, the Union of Ceironia, the Republic of Jimaria, and the United Kingdom of Azyeri-Bordo on outrageous and untrue allegations. We have closed off our canals to those nations. After entering negotiations, they have presented us with outrageous demands. Among the list was the demand of a near complete dismantlement of our defensive forces and to stop honouring our overseas commitments. Such a thing cannot be accepted by us. Now they threaten war. The dream of the High Kingdoms project has always been of peace and liberty, of upholding the rights of every nation no matter the size. Over the years, we have provided many support to your causes. Now we humbly ask you to support us in our time of greatest need. We ask for: Trade treaties to alleviate losses; foreign aid to help ruined businesses; and recover any other aid you can provide."

Lothern
$476 million in damages, 82 dead

Azyeri-Bordo
$12 million in damages, 2 dead

Fazar
$212 million in damages, 82 dead

Effect on the World Economies
The top eight are shown because the position of ninth, tenth and eleventh are similar sizes and include disputed countries such as Ciyuga and North Heboi.

Figures in 2506
This figure is prior to most of the factors causing the recession.

Figures in 2509
This figure is half way through the recession and shows significant impact such as 3 trillion drop in Ceironia while nations such as Hvede lose only around 200 billion.

Figures in 2512
This figure is after the International Concord declared the recession over. While Ceironia hasn't recovered to pre-recession levels, nations such as the High Kingdoms and Suton have surpassed their 2506 figures.