A summit of the European Union took place recently. Initially, it was planned that the summit will sum up the results of the outgoing year. But in the end, the main topics of the agenda turned out to be the financial aid to Greece and the creation of a bank union.
Both topics divided the summit’s participants into two antagonistic parties. Some of the participants believed that it would be better to help Greece, some were concerned that this would only cause more problems. The suggestion to endue the European Central Bank with much broader authorities also stirred a heated debate. However, the sides had to find a certain compromise – and found it. The outgoing year was very difficult for many Europeans – mainly, for Greeks. Representatives of the European Group had to come to Athens to check how Greece was implementing reforms, in exchange for which it received financial aid from several other countries and international organizations, practically every month. However, the reforms went on rather slowly. Since the beginning of this year, Greece’s state debt reached the point of 160% of the country’s GDP. The millions of euros that a number of international creditors allocated, although reluctantly, to Greece, turned out to be of little help. Meanwhile, rating agencies lowered Greece’s ratings nearly with every coming day. In November, it turned out that Greece was standing on the threshold of another financial default. But the authority of Germany’s Chancellor Angela Merkel and France’s President Francois Hollande, who insisted that another tranche should be allocated to Greece, outweighed the voices of those who were against this – and Greece received another € 50 bln. However, experts say that this sum will most likely be not enough for Greece to cope with the crisis in the next year. Europe should look for some other ways to stop the crisis in Greece, and there already exists a suggestion of creating a bank union. "The main task now is not to let the crisis in Greece spread to neighboring countries," Russian financier Maxim Shein says. "I find it a good idea that the European Central Bank will control the situation in Greece," Mr. Shein says. "But I think that this was in fact done to endue the Central Bank with more possibilities to help European banks if they need this help. This may stop the financial crisis to spread further." At present, there are about 6,000 financial and credit organizations in Europe. Germany and France’s idea is that the European Central Bank should control them all and interfere in their activities if it finds this necessary. Initially, the project even included it that the Central Bank should have the right to veto bargains of amalgamation of banks. But the UK was categorically against this, and its position was also supported by the Czech Republic. As a result, a decision was adopted that the Cenral Bank will be allowed to possess control only over 150 European financial organizations, which have assets in various countries. "The principled position of the UK turned out to be very well-timed," another Russian financier, Alexey Terekhov, says. "The UK has always, to a certain extent, distanced itself from the rest of Europe," Mr. Terekhov says, "and it is not unexpected that the UK now wants independence for its banks as well. Speaking about what is behind the position of the Czech Republic, I would suppose that the reason probably is that the Czech Republic is now experiencing no financial crisis at all. In such a situation, for Czech banks, coordinating their actions with the Central bank would be nothing but unnecessary bureaucracy." In whole, Europe is experiencing a very difficult situation. But many experts believe that there is a chance that the measures suggested at the recent EU summit may help Europe to overcome the crisis, although this will most likely take a long time. It may hardly be expected, experts say, that in the foreseeable future, the measures of tough economy that Greece is trying to implement would help it much. As for the bank union, experts predict that any feasible results of its work will appear not earlier than in 2 years from now. It looks like in such a situation, it is only new wise decisions of politicians that may really help Europe. Source: Voice of Russia
