How long will it take to write euro’s obituary? This is one of the prime concern doing rounds in Europe, as Greece falters on forming a new government and seems to be on a velvet divorce with euro.
Moreover, the fact that euro has hit record low in the last fiscal quarter and uncertainty looms large whether it would ever be able to recover has sent markets down and put investors in a jittery mode. With Athens determined to renegotiate its loan terms with international donors and many more countries sitting on the fences to exit out of euro, the geo-economic scenario seems disastrous. Not only will it have an adverse impact on the recovery process in which the continent is engaged, but also result in derailing the trust that extra-regional elements want to repose in the European tender. The situation is fraught with concerns, and is in need of a remedy that is real and reassuring.
Whatever may be the outcome of fissures that are erupting in the eurozone, the point is that austerity, cut backs and fine-tuning of macroeconomics is not an answer. Greece, France and Italy have voted against the donors-driven doctrine, and want a solution specific to their nationalistic desires and aspirations. This is too much of corporatisation at the altar of citizens’ welfare in debt-laden countries is taking its toll and the entire international order is on the brink. Growth, inflation and debt-servicing are issues that cannot be put on the backburner as investments and markets continue to dip down. The way out could be what the G-7 of yesteryears had proposed and practicised for some of the handpicked ailing economies of Africa, Asia and Latin America. Waiving off bad debts and regulating the sick ones can, at least, make the little difference that cash-strapped economies are looking for.
Unemployment and an anemic growth could come to take a bigger toll if pessimism among the youth and the private sector lingers on. Spain is a case in point where estimates say that unemployment rate has just soared over 25 per cent. Germany and other centre-right states should be more concerned about peace and prosperity of the Union, than being merely academic in lecturing on extra-taxation and cuts. Saving the euro should be secondary. The prime task should be to preempt another economic collapse.