The “apocalyptic” 2012, the year of "the existential crisis of the European Union


A Euro zone "disaster" was averted but only temporarily, was the verdict on 2012. In a year described as "the existential crisis of the union" by many of Europe's leaders the European Union's single currency went to the brink. Greece appeared as if it was headed for 1930's style political and economic collapse as a technocrat "national unity" government headed for collapse in early 2012. Amid a bank run and growing opposition to an EU and IMF austerity program, imposed as the condition of a bail-out, it looked as if Greece would default, bringing down the Euro. Greek elections in May took place amid boiling social conflicts and returned a radical Left-wing party Syriza, opposed to the EU and IMF, as the main opposition party. Greece's fate hung in the balance for a month without a clear parliamentary majority and market contagion threatened to lay waste to Italy and Spain. A second round of elections in June still left the radical left as the main party of opposition but gave the centerright and center-left enough votes for a majority. A neo-Nazi party Golden Dawn made unprecedented gains and in may, the election of Francois Hollande as the first Socialist President of France in decades added new "growth" elements to the eurozone sparking market fears that austerity was killing the economy and opening up new divisions between Paris and Berlin. The new Greek government, which passed draconian austerity measures that had sunk its predecessors, entered into new talks with its EU and IMF creditors, concluding in a second bail-out in the winter. However, doubts continued to linger over whether the country would be able to pay back its debts. An outlook painted in dark colors, as many had grown to fear the worst, started to brighten lately. Confidence in Mario Monti's technocrat government in Italy and widespread hope in the determination of Mariano Rajoy's new Spanish administration to pass reforms halted market contagion. The main key moment came in July after Mario Draghi, the president of the European Central Bank, pledged to do "all that it takes" to save the Euro. By the end of the summer market turmoil abated as details emerged of his plan for unlimited bond purchases to help struggling countries such as Spain and Italy with the cost of borrowing. To “Brexit or not to Brexit” A growing worry, overshadowing fears of a Greek exit from the euro, was and still is that of a "Brexit", Britain leaving the EU. David Cameron, the Prime Minister broke a so called taboo in December by stating that, while not his preference, leaving the EU was "imaginable". The fears were fueled by

revelations that senior Tory cabinet ministers were relaxed about leaving the E.U. , a hint about a possible referendum and an increasingly hostile parliament, which defeated Mr. Cameron to demand cuts in Britain’s contribution to Brussels. Not even the award of the Nobel Peace Prize to the E.U. in November could ward off a sense of cold shiver as the year ended. In the sunny southern democracies, as the year 2012 went down with the resignation of Mr. Monti and the return of Silvio Berlusconi to Italian politics, the real questions remained as to whether Europe had averted a crisis only to have it return next year with more strength. My humble feeling however, is that Germany and the oligarchy will devise a new system that will allow some euro member countries to leave while establishing they are not really "leaving". Rather, they will be "realigning" in a parallel system of quasi linked membership. This new "not leaving" system will allow its member countries to switch to an "associate euro" bound by new national rules with zero centralization. Translated : Countries will quit the euro, launch their own national currencies … Only no-one will be allowed to say that ! Data: December 21. 2012

Mircea Halaciuga, Esq. 0040-724.58.1078

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