I read a tweet from the EU commission the other day about a survey, saying that “EU citizens satisfied with life, but reveal low confidence in national economies”. That makes me wonder how they can draw that conclusion when the majority of EU countries have the Euro, and when the Euro is out of the member states’ control.
I read through the bit where people had asked questions about their faith in national economy today, compared to five years ago and 12 months forward. The conclusion I drew is that all countries, with a few exceptions (Sweden being one of them) were very negative to their countries’ economic situation in general. Because that was the question asked: How would you judge the economic situation in (our country). In my opinion, it is a large difference to say that Europeans have are pessimistic about the economic situation in their country compared to saying that they have low confidence in their national economy. Especially when that national economy is largely controlled by a currency they can not control.
Now, I am aware that there are economic factors even Euro-countries can control and that also countries without the Euro were pessimistic, but in times of economic hardships, the ability to control its currency according to changes in trade, unemployment etc. is essential. Just look at the very most pessimistic Europeans in the survey when they get to compare the situation today to five years ago, not surprisingly coming from Spain, Ireland and Greece. What these countries need to be able to do is to devalue their currency in order to stimulate trade and investment to get their economy back on track. But they can’t do that, because their currency also needs to fit stronger economies such as Germany. It will be very interesting to see how these countries will manage to pick themselves up and continue without bankrupting the entire Euro.
The fact that individual countries start to put their feet down against the huge contributions they are expected to make towards the bail out fund for Euro-countries is a strong indicator that the economic politics of the EU have gone too far. A few days ago, Slovakia voted no to a contribution of €7.7 billion, which is about 12% of their GDP. The motivation was that they have also faced very hard times with the economic crisis, but that they have saved themselves out of the crisis. That they simply can not afford to bail out countries who do not want to take the same measures they did themselves. The opposition leader compared the average Slovak pensions of less than €400 to the Greek average ones of €1,400 and asked if it’d be fair that the Slovakian pensioners pay the bailout of wealthier countries when they still spend as much as they do.
It will be interesting to see how the EU deals with this, as a no simply is not good enough (just look at how the Lisbon Treaty went through). This will continue to be voted on in Slovakia until they reach a yes. One of the political parties abstained from the voting as a protest against the leading party. Their condition for supporting the bill is re-elections, which means that they get a chance to run the country. The prime minister is expected to agree to this, a yes will be achieved and Slovakia will be €7.7 billion poorer.
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