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Brussels on trial

With the current state of the European economy and the massive problems facing the Euro the politicians in Brussels aided by the Governments of France and Germany stand accused of a dereliction of duty to the population of Europe and flagrant disregard of the risks of creating the Euro. How do they plead? Innocent or Guilty?

The case against them is still being finalised but the evidence is mounting that Europe is failing, with consequences likely to be felt around the world, damaging the livelihoods of ordinary people around the globe. However, these are the facts as they stand today.

Greece has needed financial aid from its European partners for years, yet none has been forthcoming, without harsh penalties to its population, who are already floundering under severe austerity and without strong leadership to lead them from the disaster now knocking at their door.

Germany in particular, has been found wanting in creating the necessary financial lifeboat needed by Greece. But aided by France, they are prepared to sacrifice the Greek people for the good of the Euro, when all logical financial solutions dictate that Greece should leave the Euro. The political objective of maintaining the Euro has been allowed to become the only objective. There has been no plan B established to assist Greece or a recognised plan for the managed exit of Greece from the Euro. The resulting uncertainty has seriously affected financial markets and in turn, the populations of countries throughout Europe and beyond.

The Euro was created over a decade ago, from political will, without establishing a fiscal structure to harmonise European countries. This despite warnings from many, who said that the creation of a single currency without fiscal harmony would bring about inequality, where the strong economies would grow stronger and the weak would get weaker. This imbalance would create social unrest and threaten the very existence of the European single market. Sound familiar? These risks were totally disregarded by many Politicians and experts that should have known better, preferring instead to concentrate on political ideology and thus countries with weaker economics were encouraged to join the Euro, just to achieve a political utopia but at a cost to the population of Europe.

The expansion of the European Market and the Euro has been allowed to be the single objective without due regard to the risks that were being taken. Such laissez faire management by Brussels and the Governments of Europe was the most outrageous gamble against the obvious risks of disaster that we have seen since the Second World War! What is your verdict?  Or do you have a plea for their defence? Dammed if I can think of a defence right now!     


Comments: (5)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 17 May, 2012, 17:38Be the first to give this comment the thumbs up 0 likes

Hindsight is always 20/20, as they say. I used to live in the heart of the Euro - Frankfurt - when it was launched and I remember hearing very different things at the time. Instead of inequality, the Euro was expected to foster equality when combined with free labor markets within the larger EU region. This made sense then, it continues to make sense now. Besides, former currencies of now Eurozone countries were converted to EUR at non-uniform exchange rates - 2DM:1EUR and 6FFR:1EUR if I recall correctly - that reflected their respective strengths. Ten years later, it's another matter whether the expectations have materialized or not, but, for one, that's how I remember them and, for another, I won't blame Brussels for the alleged profligate behavior of Greece and a couple of other floundering nations in the Eurozone. 

Gary Wright
Gary Wright 17 May, 2012, 19:31Be the first to give this comment the thumbs up 0 likes

You make my point very well. You believed what was being touted by politicians like millions of other people. It was sold so well you still believe it today despite all the evidence before you.

Who was it that created the Euro and the Eurozone? Who created the regulatory infra structure? Who sold the story that Europe would become the major global market? Who allowed strong economies to thrive upon the weak? Who still fail to lead and make decisions to get Europe out of the Crisis? I can go on and on but Brussels is on trial what is the case for the defence? Or isnt there one?

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 18 May, 2012, 19:52Be the first to give this comment the thumbs up 0 likes

I don't recall these views being expressed in the mainstream ten years ago, so you make my point about hindsight being 20/20 very well. Brussels didn't force anyone to join the EuroZone. It invited individual countries fulfilling certain conditions to join the EuroZone. Greece and other countries took the decision to join it just as UK decided not to join it. Brussels is not culpable and doesn't need to put up any defence. If anything, it's the governments in Greece and the other floundering countries in the EuroZone who should be on trial. They need to defend not only their past decision to join the EuroZone but also their present plight.

Gary Wright
Gary Wright 18 May, 2012, 20:31Be the first to give this comment the thumbs up 0 likes

Wrong! Who changed the entry conditions to allow Greece and other weaker economies in? As for people warning about the project there was plenty in the UK

A Finextra member
A Finextra member 25 May, 2012, 09:42Be the first to give this comment the thumbs up 0 likes

Why, when it was so easy for countries to join the Euro, is it somehow impossible for them to now leave without all the hohah.  It represents a failure, a bankruptcy, walking away from debts which the Eurozone have to write off, and starting again with severe difficulting in transacting business outside Greece as a result.  Its like a family handing in the house keys to the bank because they cannot afford the mortgage any longer and there's no bank of mum and dad to help.

As with everywhere else, there is plenty of money tied up in Greece, and plenty owned by Greeks in US bonds or whatever, and they will have to run away or bring it back into the new currency.  And still the average Greek will suffer, prompting a 3rd world and civil order catastrophe which Euro countries will have to help with like a Social Services handout.

The money in Greece got sucked up like a sponge, but spent. Spent paying loans and buying goods.  Buying goods probably mostly from Euro-producers, in Euros, so the money floats around the monetary system and ultimately may have to be used by the richer countries to prop up the deficit Greece has. Like in life, when you spend more than you earn, its miserable, especially when you seen no immediate prospect to earn more and balance the books, and when the 'state' stops helping you out, you sell up what you have and start again.  You'll still need handouts, but at least your costs will be cut.

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