While Hungary should be recognized as the main hotbed of political resistance in today's European Union, the situation regarding opposition to Brussels in financial and economic issues is more varied and more dangerous to the Brussels bureaucracy.
The Eurozone is clearly having a relapse, if not a new wave of crisis. According to the London Financial Times, an 11 billion euro «hole» has been found in the program for rescuing the Greek economy. The publication states that before the end of this year, the governments of the European countries which are the main holders of Greek debts need to allocate at least half of that amount to the Greek government. Otherwise the country, and consequently the entire Eurozone, could have serious problems. «If investors are not persuaded that the policy for dealing with the debt problem is credible, investment and growth will be unlikely to recover as programmed,» write sources in the International Monetary Fund, as quoted by The Financial Times. [1]
The main problem is that it is not just a matter of allocating funds to Greece; it is a matter of writing off part of its national debt. In any case, that is what the IMF is recommending. Currently, practically the entire state debt of Greece is in the hands of European governments and totals 176% of its national gross domestic product.
The main «donor» of the program for saving the Eurozone and particular parts of it, Germany, does not urge the writing off of the debt, but quite the opposite. Federal Chancellor Angela Merkel and the members of her cabinet are convinced that the Greeks should not count on any write-offs. After all, the country has already been allocated around 250 billion euros as part of various anti-crisis programs, and the inspection missions of the European Commission, the ECB and the IMF, which regularly visit Greece, report that the national government is successfully executing its obligations for combatting the crisis. So the need for emergency concessions has already passed.
Both the logic of the IMF and that of Germany have a basis for their existence. Endless writing off of debts and other emergency measures can discredit the European Union's anticrisis mechanisms. In addition, Germany will be having its own very complex elections in late September, and the ruling center-right coalition is clearly not prepared to throw around billions of euros from the pockets of its own taxpayers.
At the same time, once having begun the «rescue of the common Greek», the EU and the IMF cannot stop halfway; otherwise the prior sacrifices and expenses would be in vain.
Usually, when two parties cannot agree, a third must intervene in the controversy, and it seems that this third party will be Paris. Former chief economist of the European Central Bank Jürgen Stark has hinted at this. At the same time, in an interview with the German newspaper Handelsblatt, he criticized the entire program launched a year ago of unlimited buying out of the sovereign bonds of «problem» Eurozone countries. In Stark's opinion, the crisis in the Eurozone will get worse in autumn of this year, as the past year was spent pointlessly and the leadership of the European Union has not succeeded in its main task: developing effective methods of managing processes in the Eurozone.
As a result, in the near future France will state its «dissenting opinion». According to Stark, after waiting for the end of the tumultuous pre-election battles in Germany, Paris will demand that the ECB and the German government (regardless of what kind it ends up being) curtail austerity measures and at the same time buy French bonds after buying Spanish and Italian ones. And most likely the ECB will be forced to accommodate France's demands.
It is only clear that the new controversies will bring neither political unity to the European Union nor economic stability to the Eurozone. For now, ECB President Mario Draghi promises to continue the current course and, in particular, keep a low interest rate unchanged «for a long time». However, if Jürgen Stark is correct, this tranquility could turn out to be «a waste of time». It is worth mentioning that the German expert left his post in the ECB because he disagreed with the bank's policy of wide-scale buying up of Spanish and Italian government bonds.
What significance do all these maneuvers have for the political situation in the European Union? Very direct significance, and clearly destabilizing. A clear example is the dramatic events in Bulgaria, which until recently had never been a «problem» country for the European Union in the economic or political sense. However, Brussels' inability and unwillingness to meet its Bulgarian partners halfway, along with the previous center-right ruling coalition's stubborn adherence to a pro-Western course, led relations between Sofia and the EU into a dead end. This was combined with suspicious schemes in the Bulgarian housing and utility sector through Central European intermediaries, and as a result, Bulgaria split into «left» and «right» halves, and the party of the Turkish ethnic minority, the «Movement for Rights and Freedoms», took the «golden share». Taking into account the fact that the unemployment level in Bulgaria, even according to official European Union data, is over 12%, and among young people it is 28%, the country has a good chance of becoming a new Greece in the EU. That means repeat elections, fruitless coalition negotiations, a weak government, growth of radical sentiments, and in the end, essentially being controlled by Brussels, as happened in Greece. The refusal of Bulgarian President Rosen Plevneliev to sign the budget drafted by the acting center-left government, made public on August 7, could be a prologue to this… [2] Even now, government experts have lowered the forecast of the country's economic growth in the current year from 1.9% to 1%, and from that level it is not far to recession. So the hotbeds of internal conflicts and resistance in the European Union are multiplying literally in front of our eyes.
«It is becoming increasingly clear that if Europe is to overcome its crisis, business as usual will not suffice. We need a Europe that is more concrete, less rhetorical, and better suited to the current global economy. We need to focus not only on the European Union’s specific policies, but also on how to change its “politics” – a change that must place economic growth at the top of the agenda.» These very sensible words were pronounced recently, not by some Eurosceptic or antiglobalist, but by the current prime minister of Italy, Enrico Letta. He continues: «Europe does not need a debate between austerity and growth; it needs to be pragmatic…»
It is difficult to argue with this self-critical statement. What is disquieting is something else. It seems that the leaders of EU countries have only begun to mature five years after signs of financial, economic and sociopolitical crisis had begun to be observed within the EU. And with such a slow anticrisis reaction, the European Union cannot count on a quick and steady recovery.
