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One dollar-one euro
by Thanos Kalamidas
2012-09-28 08:31:45 |
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Waiting for the weekend three south European countries, all eurozone members are getting ready for a series of new economic measures that lead to series of serious cuts and all three of them facing a common problem. From one side the cuts mainly target the ones who are more frail in front the system – the salaried, the pensioner and the small businesses – and from the other the state continues borrowing increasing the national debt. And it is fine to search who is to blame but the main question should be what are we doing and if what we are doing is the correct thing.
On top of that in a globalized economy with often clashing agendas between the players or even inside the institutions that participate make the suggested solutions part of the problem. The International Monetary Fund (IMF) is the best example of all that. Serving for decades the American economy and a contemporary colonialism invading and controlling states through their finance often crossing the line between currency and acting politics has changed things from South America to Africa. Actually the IMF has often become a bar of pressure to the entire third and growing world especially where certain interests had geopolitical agendas.
For those economic and geopolitical agendas an economic – and gradual political – unification of Europe and USA was and is an aim for many reasons mainly economic. But this unification demanded first a common currency and it is fine if it was called dollar in the one side of the Atlantic and euro on the other, the name didn’t make the difference what made the difference it was going to be their strength and equal value. One dollar, one euro. If you add to that and as reality proved the last ten years, the influence these two currencies have into other states all around the world – there are over thirty countries this moment especially old European colonies that use euro as their unofficial currency – you see the importance of one dollar-one euro.
What they didn’t calculate was history as an element in their predictions and calculations. It was not only Europe that wanted a strong currency to make first the inside Europe exchange easier it was also the ones – including old enemies – who wanted an opposition to the dollar. Suddenly politics became an element that actively strengthen euro destroying the balance. China, the biggest market and export in the world started using euro the same time it was the state with the biggest reserve of dollars and they like it or not, America’s biggest commercial partner. And we might – for a various reasons including political – underestimate Russia’s energy production power, Russia also turned to euro leaving the dollar in the side. The balance one dollar-one euro in months became an impossible dream but the balance should return.
Ironically while president Obama tries to Europeanize America, especially with his health and welfare state program, Europe becomes more Americanized with the difference between classes obvious and the fact that you are fine only if you have a job that serves the system unconcernedly if your income barely serves your basic needs. Have you noticed that the most obvious result of the European crisis the last three years has been one dollar-one euro?
Coming back to south Europe now. The cuts have supposedly dual target. Minimizing the coast of the government’s expenses they try to limit the borrowing money. But this also has a dual negative result. The weakening of the market; 25% unemployment in Greece and 24% unemployment in Spain are catastrophic and while they continue like that there is no hope for growth. The truth is that in both countries the market is numb waiting for the worst to come. And the same time the state is forced to continue borrowing increasing the national debt which apparently without growth and all these unemployed to protect comes to the point where they save from one side losing more from the other.
The last ten years states and economists from all around the world talk about the domino effect. The problem this moment is not what happened and if what happened will create precedent for more to follow – Italy is already on the cue – but if the solution that have been suggested and apply for those three south European countries will trigger this domino effect. What we have notice the last three years is that based in often dark predictions and fears the markets have acted negatively to those solution and as a result deepen the crisis. Any new measures to any European state the last three years either forced or made out of the need to protect the coming crisis – including Finland and Germany – instead of strengthening the trust of the market have weaken the currency, the bonds and increased the debt and the doubt with the derating France from the rating agencies as the latest example.
Perhaps the solution is much simpler, out there and hiding behind all the lies, the agendas and the plans. Perhaps the solution is in the truth, admitting that there is a failed agenda and instead of trying to save the unsaved plans try to save to people.
Ovi+economy Euro Ovi+Europe Ovi_magazine Thanos_Kalamidas Europe Ovi EU |
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