Green: “The Monetary Union Was Problematic From The Offset”
10 junio, 2013
The Eurozone crisis has crippled the region since 2009, despite recent signs of potential improvement, many believe that the crisis is very far from being over. Even global banks have not been able to divert themselves away and are not completely safe. If we look within the countries themselves, the majority of them are suffering huge increases in unemployment rates.
To help me understand the Eurozone crisis and to see what it means for the future of Europe’s economy, I met Jordan Green (MSc Business Economics) in Madrid for some British Tea and to discuss the aforementioned matters.
How serious is the Eurozone crisis?
Jordan: This is a very serious issue, absolutely everybody needs to be paying extremely close attention to the markets, whether that is the creditors of struggling countries or the policy makers Europe- wide. Why is that so? If a solution is not found will continue to lead towards what could possibly be the most damaging financial crisis ever seen in Europe.
Will we see a break-up of the EU?
I do not think so, i think that if we were going to see a break up then it would have happened already, what we have seen is the countries trying to stick together and pull through in unison. A break up of the euro also comes with certain risks that in my opinion, not even Germany could afford to take.
In your opinion, what have been the key causes of the crisis?
You know, everybody would love to be able to pick out point in time and say yes, that is where the problems began. Sadly it does not work like that. The crisis has been a fairly complex issue and there are various root causes. One thing i am certain about is that the monetary union was problematic from the offset. The frameworks that were first laid down by the union caused a lot of issues. Another possible cause is the difference in competitiveness between some of the members within the union, for example Spain and Portugal are barely competitive within the Eurozone.
With this recession seemingly lasting forever, what are we doing wrong? Do you think we can learn from other currencies in order to overcome the crisis?
I would like to point out that it is not just the Euro that is experiencing problems. In fact in the US in 2007, they were feeling the effects of recession before we were here in Europe. As i mentioned earlier, the design of the Eurozone is flawed. The financial crisis that struck the world has revealed them flaws although every day it seems as if we are realising more and more flaws.
With unemployment sky-high in the countries within the Euro, do you think it would be logical to tackle that issue first? As opposed to always concentrating on the financial issues.
The sooner that we change the fiscal policy, the sooner we can hope for some improvement. There is most definitely political and social problems within Europe that need addressing if we are to stand any chance of overcoming the financial crisis. Sooner or later we have to line up with the rest of the world and adapt new styles.
Is this the end for Europe? We are fast being caught by the Far East and South America. If we were to be caught, do you think that Europe will ever be able to regain its place as a world leader?
This is a very serious issue. I do not think that the current crisis will be the end of Europe. We are powerful enough to be able to bounce back. The world would benefit from a stronger Europe.
Recently, there have been some suggestions that the Euro may not be too far away from recovery, what are your thoughts on this?
Honestly, I do not think that we should gain too much hope from these stories, while there are still countries struggling such as Italy, the Eurozone would need a huge improvement all round to be able to steer clear of recession just yet.
The president of the European commission said this week that austerity has reached its maximum, with this in mind, is it time to reduce efforts?
I would not say so, some countries need extra help in areas where others do not, for example something needs to be done about the unemployment in Spain. However, in the end yes, debt levels need to come down.
What has been your verdict on Angela Merkel’s leadership throughout the crisis?
I like her style, she seems to always aim to find a consensus and she never ignores the smaller countries. Whenever I have seen her speak she always has her facts exactly straight. Personally, I would love to see her one day become president of the EU.
By Sean Farrell