by VK
The European Union plans to hold a summit in Paris and Brussels to discuss another package of measures to resolve the crisis of the euro zone. Experts had a video conference on the topic and shared expectations of the summit in Brussels.
Michel Aglietta, a scientific counselor at the Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
The crisis of the euro zone is part of the global financial recession that started in 2007. Thus, the growing budget deficits is part of attempts to save economy in 2008-2009, when the government was forced to allocate cash in banks to save them from inevitable collapse due to increasing debts. The private sector of economy trying to pay out the debts is acting according to strict principles of economy, neglecting attempts of the government to revive economy.
There have been over 10 summits since May 2010 with condemnation of measures taken, but the euro zone crisis continues, nonetheless. European states plan to make the final step towards formation of the EU budget, but there are still controversies on how to fill the budget between Germany and France. The main problem of the euro zone is enormous state debts, yet the problem of trust between partner states remains topical. There is lack of trust between European banks too. We want all EU states to look into the future and take obligations for the upcoming year, but none of the states wants to be bound with any obligations in the future. At the same time, improvement of state financing requires conviction of the market in long-term stability. States are forced to contract debts to invest economic development and, thus, attempts to reduce budget deficit are made within economic recession.
Christov Blo, a member of the Observatoire Français des Conjonctures Économiques (OFCE)
The euro zone does not only need common rules states could follow in forming their budgets, but also need common coordination closely connected with the idea of budget discipline. This is why states of the euro zone are urged to lose part of their budget independence to form federal structures for the euro. Greece’s leaving the euro zone is not a topic for the near future. But Portugal has a high risk of repeating the situation in Greece.
Vasily Solodkov, Director of the Institute for Banking
According to Maastricht criteria, budget deficit of states entering the euro zone must not exceed 3%, but this principle has been violated numerously. And it is not Greece only. There have been no sanctions developed for such states. Despite the complicated situation in the euro zone, European banks still consider investing in Russia unreliable, which is a potential threat to sustainability of Russian banking. Recession in the euro zone and dropping oil prices may have a serious effect on Russian economy, which is based on exports of resources only, especially energy carriers.
Alexey Kuznetsov, head of the Center for European Studies of the Institute for World Economy and International Relations of the Russian Academy of Sciences (RAS), a corresponding member of the RAS, a Professor of the MGIMO of the Russian Foreign Ministry and expert of the Group N20 “International position of Russia: economic orients” for updating “Strategy-2020”
The euro zone faces two different tasks that need to be completed: overcoming the crisis and formation of a long-term model for development which would prevent such crises in the future or at least allow the states to cope with it fast. The situation in Greece is a classic result of unwise economic policy. Obviously, many states would speak out against limits to budget sovereignty in the years of economic prosperity. January 30th will most likely see a document of shirt-term measures. Concerning sanctions, they are only of use in long-term prospects.
