Italy is going to elections by the end of this month after 14 months of technocratic-ruling administration. Pier Luigi Bersani, the center-left candidate has a good chance of becoming Italy’s next leader and couple of days ago I attended a short, yet very meaningful speech of him at the German Council on Foreign Relations in Berlin. Pro-European, sharp and thoughtful, he delivered indeed a strong message.
Posts Tagged ‘ Eurozone ’
While the ECB’s latest bond-buying scheme OMT has been greeted with enthusiasm in most of Europe, German politicians, economists and media remain sceptical. The main reasons for this are concerns about inflation and different German central banking traditions, which raise general questions about the ECB’s mandate.
While the rampant inferno of the financial crisis has been temporarily contained, Finland has recently stunned EU leaders, who have been promulgating the importance of the financial bailouts for both Greece and Spain by contemplating a Finnish exit from the eurozone. Henri Erti explains why Helsinki believes this might be wise.
The financial markets have been subject to considerable criticism in the last weeks; analysts are worried that financial considerations will dictate decisions that should be taken via a democratic process. By analyzing the reasons and the effects of the criticized behavior the conclusion must be drawn that Europe in the long term should be grateful for the present warnings of the market.
Contrary to common perceptions, the so-called Euro-zone crisis is far from affecting only the seventeen countries of the single currency. The effects of the crises can be felt even further, outside Europe. African countries that have barely recovered from the troubles of the 2008 financial crisis, already realise that they may also be indirectly affected in, at least, two different ways by the Euro-crisis.
Closer cooperation of the eurogroup countries, though necessary, creates the risk of creating serious rifts in the EU, leaving it more than ever divided between insiders and outsiders. However, even though more integration of the eurogroup in the fields of economic, financial and social policies should be welcom
Eurozone leaders have agreed to boost the European Financial Stability Facility’s lending capacity to one trillion euro, believing that this should calm markets and prevent the “contagion” from spreading to Italy or Spain. However, there’s neither an agreement yet on how to “lever” the EFSF, nor on who is going to pay for it. A short overview might shed some light on the issue.
The European project is stalling. Some wonder if Europe is up to the task of dealing with the current crisis in the eurozone, the discussion over the Schengen Agreement, the Arab Spring developments and the relation with the United States. Historian Timothy Garton Ash (author of In Europe’s Name: Germany and the Divided Continent) is one of them. In the Guardian he recently stated that Europe needs a strong ‘German engine’. Angela Merkel has to show leadership in order to regain Europe’s momentum.
Greece, Ireland, now Portugal. The eurozone crisis continues and worries persist that the bail-out packages provided by the EU and the IMF won’t solve the problems of the peripheral eurozone countries. Can privatisation programmes and cuts in social spending really save those crumbling economies? I would not bet on it and prepare for the worst.