web analytics
November 22, 2014 / 29 Heshvan, 5775
At a Glance
InDepth
Sponsored Post
IDC Herzliya Campus A Day on Campus

To mark IDC Herzliya’s 20th anniversary, we spent a day following Prof. Uriel Reichman, IDC’s founder and president, and Jonathan Davis, VP for External Relations, around its delightful campus.



Eurocrisis: Russia Offers Its Services

EU and Bulgarian flags

Photo Credit: Ouria Tadmor/Flash90

Europe’s politicians will not admit it openly but they are afraid that the dire economic situation in countries such as Greece and Spain might lead to revolution. In two weeks’ time, the Greeks will go to the voting booths again. The far-left Syriza party is leading in the polls. During the past months, violence has hit the streets of Athens and Thessaloniki. Desperate people are committing suicide in public, reminding Europe’s leaders that the so-called Arab Spring, which toppled many Arab regimes, was triggered in December 2010 by the self-immolation of a street vendor in Tunisia.

Later this month, Greece needs a new round of €5.2 billion in bailout funds from the other European Union countries. In return, the Greeks must pass €14.5 billion worth of austerity measures. With a newly elected Greek parliament unwilling to introduce them, however, and with Greek politicians threatening to annul prior loan agreements, other countries are unwilling to come forward with new funds. Meanwhile, Greek citizens are moving their money out of the country, exacerbating the situation of Greece’s banks. The prospect of a bankruptcy of Greece, and of the country leaving the eurozone, seems ever more likely. Grexit – as the European media call the scenario of Greece leaving the euro – is a possibility. But how will the Greek people react? If the level of anger and frustration keeps rising in Greece, the country might descend into chaos.

The situation is equally unstable in Cyprus. The economic situation of this strategically located country is inextricably intertwined with that of Greece. A collapse of Greece will drag Cyprus along with it. Economists expect that to keep Cyprus afloat, it will need between €25 and 50 billion from the other EU countries. If the EU does not provide the money, others might. Last December, Russia already gave Cyprus a bilateral loan of €3 billion. Russia is definitely capable of bailing Cyprus out. The Russians, however, are likely to want something in return. If Russia steps in, the strategic situation in the entire Eastern Mediterranean could change. Given the large gas supplies in the waters around Cyprus, Turkey, too, is interested in gaining a stronger foothold in Cyprus. Can Israel tolerate this?

Greece and Cyprus are not the only countries in Southern Europe that are heading for political instability. In Portugal, Spain, and Italy there have also been street protests in response to austerity measures. The EU is particularly worried about Spain. Last week, the Spanish Socialist former Prime Minister Gonzalez said that his country is in a “state of total emergency.” Spain is heading full speed for a debacle.

Last month, panic-stricken Spanish citizens withdrew more than €70 billion from Spanish banks and moved it to foreign safe havens. While Greece is confronting Grexit, Spain is already in the grip of what the European media call Spanic. The Spanish banking sector is about to collapse. Bankia, Spain’s third largest bank, urgently needs the Spanish government to bail it out with €21 billion. Bankia, a state-owned institution which was formed last year out of the ruins of seven regional banks which could no longer shoulder the huge losses of the Spanish real estate crash, is virtually bankrupt. To save the Spanish banks, however, the debt-ridden government in Madrid needs at least €90 billion.

Meanwhile, with youth unemployment higher than 50%, Spain’s younger generation has no prospects whatever. They have nothing to lose and, hence, can be easily persuaded to rebel against a political system that seems incapable of offering them hope for a better future. This is a politically dangerous situation, which the United States should be taking into account. The whole of Southern Europe might soon be in turmoil.

If Spain goes down the drain, Italy is bound to follow. And if Italy, the third largest economy in the EU, goes, France is likely to go as well. The Europeans are preparing for disaster. In May, economic activity in the eurozone countries, including France and Germany, contracted at the fastest rate since June 2009.

Last week, the heads of government of the eurozone countries met in Brussels for their 19th emergency gathering since the eurocrisis began two years ago. Spain, Italy, and France have stated that they want the European Central Bank to intervene by issuing eurobonds, pooling the sovereign debts of all 17 eurozone countries.

Germany, however, is apparently opposed to a move which would provide profligate countries in Southern Europe with “a hammock made of German taxpayers’ money.” German Chancellor Angela Merkel knows that if she backs the idea of eurobonds she risks political upheaval at home. While the Socialists in the South, and especially the new French President François Hollande, insist on wealth-distribution from the North to the South, the German people do not want it.

Merkel, meanwhile, is pressuring Spanish Prime Minister Mariano Rajoy to ask for emergency funds from the eurozone’s temporary rescue fund EFSF. Spain is currently borrowing money on the international money markets at a 10-year interest of 6.7%. The eurozone countries are also putting together a permanent rescue fund, the European Stability Mechanism (ESM), with a capitalization of €80 billion.

It is doubtful, however, whether this will be sufficient. Spain not only needs €90 billion to save its banks; it also needs to bail out its regional governments, which have to refinance €36 billion in debts later this year. Further, Spain is not even the worst of the EU’s worries. Italy needs to refinance €200 billion later this year, while no one knows where to find that amount if the Germans refuse to foot the bill. Given such a hopeless financial situation, Europe’s politicians are preparing for political turmoil. But others seem well aware of the opportunities Europe’s problems might offer them. The Kremlin will not miss this chance. Already last year, Russian Deputy Prime Minister Arkady Dvorkovich said that Russia is ready to lend money and expertise to solve the eurocrisis. He offered “to both advise and also to contribute to the stability with our own financial reserves.” Last January, Dvorkovich said that “The survival of the euro is a pre-eminent concern for Russia;” last month he stated that Russia wants “Greece to stay in the eurozone.”

Russia undoubtedly has strategic interests when offering financial support to debt-ridden Europe. Many will lose through the eurocrisis, but Russia will not be among them. So far, Brussels has not turned to Moscow for help — yet. But if the situation deteriorates, that soon might be the case.

Originally published by Gatestone Institute http://www.gatestoneinstitute.org

About the Author: Peter Martino is a European affairs columnist for the Gatestone Institute.


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

One Response to “Eurocrisis: Russia Offers Its Services”

  1. Mark Urbo says:

    The economic model which develops from a socialist political environment is at its very core unsustainable long term. While the underlining economic structure steadily decays over many decades there is lag effect (or relationship) between the decay and politics which generated the policies. That is to say the net effects of socialist policies do not immediately present themselves. It can take many years or decades for the general population to suffer the consequences of such policies.

    Inherently, socialism creates an ever increasing centralized government, which must justify its growing power, size and cost by providing more services, entitlements and regulation/protection to its citizens. The real time cost (i.e., year to year budget) of this ever increasing, self justifying central body is only one component. Long term legacy liabilities (i.e., pensions, benefits and other retirement based costs) of public sector employees grow at a significantly greater rate than similar private sector employees.

    Additionally, the continued growth of public sector employment undermines private sector stability and growth (i.e., a dollar or euro spent in the private sector in more efficient than the same unit spent in the public sector). Finally, the most concerning element is a labyrinth of regulations which stunt private sector business growth, individual freedom and retard investment capital required in the creation of new opportunities. Nowhere is this more evident than in the environmental regulations which have become an instrument of governments and environmentalists to undermine private sector business growth worldwide.

    Socialism sells the ideology of “equal outcome” for all as part of its imagined utopia, but even this concept is flawed at a fundamental level. Human behavior is such that it responds and performs better when it is duly incentivized and logically this does not occur in a society where a person is provided for regardless of their efforts or performance.

    The standard cliché of “socialism works until you run out of other people's money” is unfair and over simplified. However, if your economy is surrounded by failing economies based on socialism, your economy will undoubtedly suffer and also bear their burden, which seems to be playing out right now in the euro zone.

Comments are closed.

SocialTwist Tell-a-Friend

Current Top Story
Colleagues of the hanged Arab bus driver whose death continues to be referred to as murder despite autopsy finding of suicide. These are Arab drivers of Egged buses, claiming they suffer discrimination by Israelis.
Arab Pathologist Singing New Tune: Murder (By Jews) Not Suicide
Latest Indepth Stories
Dalia Lemkos, HY"D Is this the image you think of when you hear the word "settler?"

The “Media” didn’t want us to know what a kind, giving, loving young woman Dalia was.

A “Palestine” could become another Lebanon, with many different factions battling for control.

Temple_Mount_aerial_from_south_tb_q010703bsr-300x225

Maimonides himself walked and prayed in the permissible areas when he visited Eretz Yisrael in 1165

voting

Having a strong community presence at the polls shows our elected officials we care about the issues

Israel’s Temple Mount policy prefers to blames the Jews-not the attackers-for the crisis.

When Islam conquered the Holy Land, it made its capital in Ramle of all places, not in Jerusalem.

I joined the large crowd but this time it was more personal; my cousin Aryeh was one of the victims.

Terrorists aren’t driven by social, economic, or other grievances, rather by a fanatical worldview.

The phrase that the “Arabs are resorting to violence” is disgraceful and blames the victim.

Tuesday, Yom Shlishi, a doubly good day in the Torah, Esav’s hands tried to silence Yaakov’s voice.

Because of the disparate nature of the perpetrators, who are also relatively young, and given the lack of more traditional targets and the reverence Palestinians have for their homes, one now hears talk of Israel returning to a policy of destroying the houses of terrorists’ families.

In any event, the Constitution gives Congress what is popularly described as the “power of the purse” – that is, the power to raise revenues through taxation and to decide how the money should be sent.

It is difficult to write about such a holy person, for I fear I will not accurately portray his greatness…

There was much to learn from Judge Kramer and the examples he set remains a source of inspiration and a resource from which to learn. He was and remains a great role model.

More Articles from Peter Martino
The Anne Frank Museum in Amsterdam, pictured above, is run by the Anne Frank Foundation, which wrote in a report, "Israel pushes Palestinians economically into a corner and humiliates them psychologically."

“It appears that the suffering of the Jews has not transformed their view on how others should be treated.” — David Ward, British MP.

angela and friend

Because of the “5% hurdle,” Germany’s new coalition will tilt be to the left, while voters clearly wanted Germany to turn to the right.

Belgian children aged 6 to 12 are being instilled with a deep hatred for.

Islamic immigrants are hoping that by turning out a large number of their voters at a time of German voter apathy, they will be able to promote the further Islamification of Germany.

Europeans are rebelling against the unelected E.U. and its grandiose, self-regarding project of abolishing the national sovereignty.

The valuable Cypriot gas fields are located halfway between the Cypriot and Israeli coast.

Indicative of the national mood, the French are the world’s largest consumers of anti-depressants.

What we are witnessing is the Obama administration actively interfering in European politics to advance European centralization.

Printed from: http://www.jewishpress.com/indepth/analysis/eurocrisis-russia-offers-its-services/2012/06/05/

Scan this QR code to visit this page online: