Seven Questions About The Crisis

Opinion: (Jacques Sapir, Professor, Director of the Industrial Studies Research Centre, School for Advanced Studies in the Social Sciences, from

1. Is there any hope for a favorable resolution of the situation in Greece? No.

2. Will the crisis expand? Yes.

3. Can’t the leading European states offer help? The Germans and the French are debating it. The Germans are against help, and the French are in favour. If the German position prevails, the future of the eurozone is uncertain.

4. How do you explain the German position? Already in the 90s, a greater fiscal, budgetary, and economic integration was needed. But for the time being, the integration is not happening, and if so, Germany will have to subsidize the EU countries. Thus, the German elite are ready to accept the fact that the eurozone will cease to exist.

5. Why did the Stability and Growth Pact fail? This Pact is not about growth, but about saving the budget. And those countries that had introduced it have gotten the reduced growth and recession: Tax revenues get smaller, and this increases the debt.

6. The worst scenario for the global economy is the collapse of the eurozone, isn’t it? The collapse of the eurozone will impact the reserves, but in the long term will keep Europe from recession. If the euro is saved, Europe and countries that depend on it, such as Russia, will face a long recession and reduced demand.

7. And how will it affect Russia? In both cases, Russia will go through hard times because Europe is the main consumer of Russian exports: oil, gas, and metals.

Related Material:
Russia: Prices Will Rise And Income Will Drop
The Fears Of The EU Leaders
The Crisis In Europe Is Political Rather Than Financial
Europe Has No Strategy For Exiting The Crisis

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