It seems like the European Union (EU) has been in a state of endless economic uncertainty, though 2013 offers hope of a snail’s pace recovery. Once threatened with a breakup due to countries unable to meet membership terms, it appears now that the EU will remain intact. However, between the incredibly slow recovery, the ongoing financial insecurity of countries like Greece and Spain, and high unemployment, businesses are faced with yet another year in which the ability to diversify could be stymied.

The 2008 financial collapse proved that business interconnectedness can wreak havoc as much as it can promote growth. For example, the EU’s largest trading partner is the United States. Before the recession, EU businesses had diversification options by meeting increasing U.S. demand for imports. In addition, U.S. firms were seeking European partners for expanding their own businesses. Since the recession, there is a lower demand for imports coming from the U.S., forcing many EU businesses to look elsewhere, to China, for example, for sustainability.

The good news is that uncertainty over the euro’s sustainability has kept the U.S. dollar expensive, which has improved the EU’s export competitiveness. In fact, EU member states have seen a relatively strong recovery in exports, largely due to China and emerging economies. This has had the effect of softening the impact of the recession on exports in many of the EU countries, enabling some businesses to survive.

In typical “domino effect,” a stagnant economy has forced the EU’s unemployment rate ever higher over the last few years. Newly released figures show that unemployment continues to rise except in a handful of countries. The November 2012 (most recent figures) unemployment rate for the EU is at seven percent. To put that in terms of human lives instead of sterile statistics, another 154,000 people lost their jobs in one month, making 26 million unemployed women and men.

The staggering unemployment numbers and financial instability has a number of effects. Fewer employment opportunities mean many business plans for expanding staff diversity are on hold. It is hoped is that diversity will continue to be a top priority for the largest corporations, and that medium to small sized businesses will take advantage of staff vacancies as they arise to continue diversity agendas.

When global markets are weak, businesses must rely more on domestic consumption for sales. However, as unemployment rises, consumer spending typically falls. People have less discretionary money to spend, and fear of potential job loss makes people cautious about spending. Domestic consumption is not making up for the lower export rates, and that limits business expansion opportunities.

Uncertainty about the EU has slowed investments domestically and internationally. Entrepreneurs and investors are cautious about plowing money into new products, technologies or locations when the target markets are uncertain. There is less willingness to take risks. In Germany, investments in new equipment have fallen over the last 12 months. Companies that grew in the past through acquisition or expansion into new countries are in a wait-and-see stance.

There are signs that financial security is growing. The European leaders agreed last month to place 100 large euro zone banks under one central supervisor, the European Central Bank. That lays the groundwork for expanding the power of the economic union and restoring faith in the financial system. For now, businesses ready to diversify will need to continue looking outside the EU to emerging markets. Over the long run, the recession could prove to be a catalyst for strengthening globalization. In that case, businesses will find more, not less, diverse opportunities waiting for them.