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Der Spiegel buries the euro and The Guardian suggests Greece to leave it

20 June 2011 / 17:06:25  GRReporter
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A photo of the euro with a black strip placed on the coffin covered with the Greek flag is the cover of the latest issue of Der Spiegel magazine which symbolically buries the euro, while the British Guardian suggests Greece to give up the European currency.

Der Spiegel reportage entitled "The mercy of the euro," comments that the European Monetary Union is going to become the greatest threat to the future of Europe: the euro connects national economies that do not fit with one another. However, politicians rely on newer programs. It is a wrong way. Basically, the article says that over the past 14 months the European politicians have been taking a number of decisions for rescue packages, they have been taking part in supreme councils to deal with the crisis and taking risks on a massive scale, but are refusing to look at the truth: the old euro in its old form and the European Monetary Union are not functioning. We need a backup plan.

The European Union political leadership is making balloons, claiming that it is a debt crisis of some countries but not a crisis of the euro. But the Greek debt would be a separate case without the euro and it would be difficult for Greece, but Europe would cope easily in such a situation. The Greek debt is a problem only because of the euro and a risk to the currency itself at the same time because if Greece is allowed to go bankrupt, the crisis would spread to other weak European countries. But on the other hand, if the same policy of supporting the countries through economic packages is followed, then the European Monetary Union would become a redistributive union, which the euro "inventors" tried to avoid in any way.

The major defect for the overall crisis management is the lack of democratic legitimating of the leaders-rescuers who carry out secret meetings and negotiations, while making decisions that they only present for final approval in the Parliaments and ask the citizens to follow them without being allowed to oppose them, although it all concerns serious issues such as their social security, the labour market and their property. Therefore, the wave of citizens’ reactions against their governments which make decisions about their future under the pressure of stock exchanges and without their own strategy for emerging from the crisis are increasing daily. Two governments have fallen because of the debt crisis in Europe - the governments of Ireland and Portugal, the Spanish and Greek governments are likely to follow them.

The euro, which was intended to unite Europe, has become the biggest threat to its future. A possible collapse of the Monetary Union would draw the European countries ten years backwards. They could not be able to recover from that hit, while at the same time, their position is threatened by the economic forces rising from Asian countries. Therefore, the European politicians are willing to protect the euro at all costs and gain time, hoping that the markets would calm and the reforms would bear fruit.

After the global economic crisis, money is rarely to be found which led the European Monetary Union on the brink of collapse, because Europe is not equally developed in economical terms and the gap between rich and poor countries grows. If there were national currencies, the article reads, Greece and Portugal could devaluate them and become competitive. The only way now is to resort to major cuts in wages and prices and the governments will be required to implement these programs. But despite the measures and the risks the rescuing member countries assumed the weak European countries have not moved a single step back from the brink where they were a year ago. The Troika’ bailout to Greece proved to be insufficient so far because it was based on the assumption that the crisis would pass quickly. It was estimated that the Greeks would be able to return to the markets in the next two years to take their own loan of 60 billion euros. But there is no money because despite all the reforms, the Greek government is still not considered reliable to be borrowed. Therefore, the "gap" should be filled with hot money from the Europeans, while the Greeks would have to implement more stringent measures. But given the government's crisis of the Greek government nobody knows what will happen ...

The Prime Minister George Papandreou failed to achieve the objectives the Troika in the face of the ECB, the EU and the IMF set. After the "dynamic start" the reform persistence stopped in the past quarters, says a recent report by the Troika. "Many sacred cows have not been sacrificed yet," said the economic expert Jens Bastian for Vima newspaper, meaning that the privileges of certain circles that dominate the state organisations have not been affected. On the other hand, salaries and pensions within the 750 - 800 euro range are expected to be cut further and the taxes on products of mass use to be increased in parallel. "People do not understand why they should make sacrifices and suffer. The privilege to be part of the euro zone is losing its value for them," says the Political Science Professor Seraphim Seferiadis. Almost 30% of the Greeks say they would prefer the drachmas to return immediately.

Tags: SocietyPoliticsEconomic crisisGreeceEuroEuropean Monetary UnionDrachmaReturn to the drachma
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