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Will The EU Survive Lethal Crisis? – OpEd

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As the mainstream media try to put a lid on the emerging economic crisis in the US and the Euro zone and distract the attention of the international community from it, more Western governments adopt austerity measures to confront what is said to be one of the most injurious and detrimental economic recessions in the contemporary history.

In point of fact, the economic downturn started in 2008 and was triggered by “a complex interplay of valuation and liquidity problems in the United States banking system.” The crisis-stricken United States spread the virus throughout the world and many countries, from the Southeast Asian nations to Russia and Western Europe, were enormously affected. Although the recession practically began three years ago, its repercussions still can be felt all around the world and only a few independent countries without economic dependence on the US and the EU have survived the pandemic.

It’s notable to point out that the EU member states such as Greece, Ireland, Romania, Latvia, Spain, Bulgaria and Norway and those countries which had a greater degree of dependence on the US and the EU have had the lowest amount of real GDP growth rate last year, as reported by the International Monetary Fund.

Among the most prominent symptoms of the financial crisis in the West are skyrocketing unemployment, diminution of consumer confidence, the continuing decline in home values and increase in foreclosures and personal bankruptcies, federal debt crisis, inflation and rising food and gas prices.

In 2010, Czech Republic, Ireland, Italy, Japan, Romania and Spain introduced severe austerity measures including a considerable reduction in the amounts of benefits and public services provided along with increasing taxes to cope with the government deficit spending while Germany, Greece, Portugal and the United Kingdom adopted the same measures in 2011.

However, it’s said that Greece is facing the worst economic recession among the Western countries. As the heads of states of the G20 are gathering in Cannes to discuss the latest developments in the Euro zone and find solutions to have their countries extricated from the recession, media reports show that the crisis in Greece has dominated the G20 preparations.

Amid growing protests by the lawmakers of Greece at the mismanagement of the domestic economy and jeopardizing the country’s membership in EU, Greek Prime Minister George Papandreou said on Wednesday that he would push ahead with a referendum on an EU bailout deal which he called would be “a clear mandate and a clear message in and outside Greece on our European course and participation in the euro,” Reuters reported.

“The most immediate hurdle” which Papandreou is facing is the impeachment motion which will be decided on Friday. He has assured the Greek citizens that he will win a confidence vote from the parliament once again and carry out the referendum as it was planned.

This comes while Desmond Lachman, a resident fellow at the American Enterprise Institute believes that the Greek Prime Minister has a difficult task to deal with. “Mr. Papandreou’s desperate gamble to now call a referendum has to be seen against the backdrop of a Greek economy in virtual free-fall under the weight of IMF-imposed austerity and a country bordering on ungovernability. His highly risky gambit will almost certainly lead to the fall of the Papandreou government, which will compound Greece’s already chronic economic and political woes,” he wrote in a New York Times article.

On the other hand, Vanessa Rossi, an economic advisor to Oxford Analytica believes that the prospect of Greece’s economy will not influence the EU remarkably, “The euro zone’s survival has very little to do with Greece. The Greek economy is too small to cause any noticeable impact on the euro zone and even the widespread and substantial financial contagion of a default can be absorbed.”

According to Financial Times, Germany’s chancellor Angela Merkel and French President Nicolas Sarkozy summoned Greek PM for emergency talks on Wednesday. They urged him to implement the decision adopted at the Eurozone summit which are said to be more necessary than ever today.

Now, the G20 leaders who are anticipated to be welcomed by the massive demonstrations of anti-globalization protesters in Cannes, Nice and other French cities have a blurred and obscure perspective of what the future might bring to them and their countries. It’s said that the European leaders, headed by Nicolas Sarkozy, want to appeal to the Asian nations, especially China, to back and fund their bailout plans for the banks which are going bankrupt in the Euro zone, especially the banks of Italy and Luxemburg.

“French President Nicolas Sarkozy, who plays host to this year’s G20 summit, has already approached Beijing about investing in the European Financial Stability facility through a so-called special investment vehicle,” CNN reported.

Lo and behold, the G20 leaders and the politicians in Euro zone are facing a big question mark. Will they be able to rescue their countries from the unprecedented economic slump and quash the anger of their people at the deteriorating living conditions?

Kourosh Ziabari

Kourosh Ziabari

Kourosh Ziabari is an award-winning Iranian journalist, writer and media correspondent. He represents Fair Observer and Your Middle East in Iran. He also conducts interviews and writes commentaries for the Iran Review news and analysis website as a staff writer and reporter. His articles and interviews have been published on Tehran Times, Press TV, International Policy Digest, Foreign Policy Journal, Global Research, Turkish Weekly Journal, Strategic Culture Foundation, Al-Arabiya, Counterpunch, Voltaire Network, Baltimore Chronicle and Opinion Maker. He currently blogs for The Huffington Post and writes op-eds for the UK-based Middle East Eye. In 2009, while an undergraduate student of English Language and Literature, he was selected to represent the Middle East students in the International Student Energy Summit 2009 in Calgary, Canada. Kourosh Ziabari is working with Gateway House: Indian Council on Global Relations as an Iran analyst. He has conducted interviews with some 380 prominent world leaders, politicians, diplomats, UN officials, academicians, public intellectuals, authors, media personalities, journalists and historians. Kourosh Ziabari is the winner of the silver medal at the National Festival of Superior Iranian Youth. He has won three awards in Iran's National Press Festival and also been a member of the European Association for the Teaching of Academic Writing. He was a member of Stony Brook Independent magazine's editorial board and a member of the Kenya-based World Student Community for Sustainable Development. In June 2015, he received a fellowship from Deutsche Welle / European Youth Press to attend and cover the Global Media Forum 2015 in the German city of Bonn. In August 2015, he was named by the Hawaii-based East-West Center as a Senior Journalists Seminar Fellow 2015 to travel to the United States, Malaysia and Pakistan for a reporting and dialog tour aimed at bridging the gaps in the relations between the United States and the Muslim world. He is also a recipient of the Gabriel Garcia Marquez Fellowship in Cultural Journalism awarded to him in November 2015 by the FNPI foundation in Colombia.

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