Agro Perspectiva

2012 Recap: no collapse but crisis continues in Europe

27.12.2012 11:53 "Agro Perspectiva" (Kyiv) — "All Quiet on the Western Front" - this is how economists humorously describe the situation in the eurozone. The worst forecasts for 2012 have not been justified: the financial union has not gone to pieces. And still, taking into account the condition it currently finds itself in, one can’t say that the threat has become nonexistent, Voice of Russia reports. Economists said that the eurozone would collapse in 2012. However, politicians for whom to maintain the financial union became a matter of principle and honour immediately go into action. They adopted an aid programme for Greece this February and immediately started putting it into practice. In 2012 Greeks received nearly 58 billion euros to be able to solve their problems. Despite that they found themselves under the threat of default and were about to leave the eurozone. In exchange for this, Greece started implementing a policy of austerity budget spending which caused dissatisfaction among the people. The residents of the other European states are also dissatisfied with the existing situation. They do not like the fact that their countries’ authorities are involved in settling other people’s problems, Managing Director of the Alor Group of companies Sergey Khestanov. «From the point of view of money flows, Greece has been bankrupt for a long time now and has been afloat only due to credits offered by foreign creditors. The allocation of credits to Greece, logically, is causing dissatisfaction among the citizens of the well-off countries. Don’t forget that soon the well-off countries will face elections. France which experienced a change of prime minister due to elections shows that it is very likely that something like that may occur in Germany regarding Angela Merkel.» In 2012 the leading countries of the Eurozone came up with another 2 initiatives, which proved to be sufficiently ambitious - the establishment of a European stabilization fund and a banking union. Although these two instruments will be operational in various spheres, they are equally powerless in a long-term perspective. The European stabilizing fund will offer help to weak economies pumping money from the strong ones. The banking union will make the banks of the eurozone countries subordinate to the European Central Bank (ECB) and will put restrictions on their work. The only thing which European politicians do not want to do is to let problem countries carry out free floating. Here they are pursuing their selfish interests, Chief of the Analytical Department of the IK Grandis Capital Denis Barabanov says. «The strong countries of the eurozone are getting big preferences and advantages as the members of the eurozone because on the one hand, they are killing rivalry in weaker countries and on the other hand, they always have a reliable and profitable commodity market, which enables them to sell highly competitive goods within the framework of their union.» On the hand, not only Greece but also Germany understands perfectly well that they will not survive alone in the modern world. Europe remains divided into the strong and the weak, as if forgetting that its former slogan was that of equality for all. Fierce disputes around each new initiative that could be used as a saving remedy are only undermining the confidence of politicians in each other, and as regards the European citizens, they stopped trusting politicians long ago.