Sunday, 29th March 2009
Eurozone may split in the current economic financial crisis
Scottish Conservative MEP Struan Stevenson has warned that the deepening financial crisis in the new accession states in Eastern Europe could cause the Eurozone to split.
Speaking at a Conservative event in Renfrew yesterday (28th March 2009), Mr. Stevenson acknowledged China’s economic stability and believes that China holds the answer to Europe’s crisis.
Mr. Stevenson said:-
“There is a deepening financial crisis in the new accession states in Eastern Europe caused by the economic meltdown. Robert Zoellick, president of the World Bank, has even suggested that Europe might once again split in two, prompting the Hungarian Prime Minister to talk about the emergence of a new “iron curtain” descending across Europe.
“No-one would have expected Europe’s leaders to stand idly by, watching the disintegration of their cherished project – the Eurozone, and yet this is exactly what is happening. Old Europe needs to help New Europe. But Old Europe is hurting too and its beleaguered taxpayers have enough on their plates to bail out their own stricken economies without worrying about Hungary, Bulgaria and the Baltic States.”
Mr. Stevenson warned that the problem is a serious one and that Europe must solve its difficulties. As a result of the uncertainty, all discussions of further EU enlargement has been put on hold and next month Germany, Austria and Belgium are expected to extend restrictions on the free movement of workers from central and eastern European countries, putting the core tenets of the Treaty of Rome, the free movement of goods, services, people and capital, under threat. The first sign that Europe is splitting to protect its individual national interests. He continued:
“At a time when Europe needs to defend the openness of its markets and to declare war on protectionism, we seem to be doing exactly the opposite.”
Mr. Stevenson said that he was increasingly convinced that the answer lies with China, saying:
“China is one of the few economies bucking the current global trend. Although they are also suffering a severe downturn and have seen job losses on a scale that we can barely contemplate in the West, they are nevertheless sustaining economic growth at around 8%. They’ve already bought a swathe of major mining and energy companies. Last week they appointed Rothschild to advise on the acquisition of troubled car giant Volvo in Sweden. Also last week a high-level Chinese business delegation travelled to Europe to explore investment avenues - close on the heels of a trade team which returned to Beijing the week before.
Struan concluded:
“This mission, I am sure, will be the first of many, as we witness the gradual shift of economic power from West to East as a direct consequence of the global recession.”
