While the entire world celebrated the New Year, many EU leaders and administrators were probably silently praying for the future of the Euro. Solidarity and cooperation which under the EU roof has never been at the necessary level for years now seem to be the condition for survival. Indeed, EU Commission President Barroso often repeats the necessity of better economic policy cooperation among EU member states.
Barroso demands that members pursue cooperation in economic policies. Everyone who pumps optimism into markets and public opinion, especially the European Commission, is worried that a threat to the stability of the Eurozone might arise. To this end, the European Commission is planning long term work to guarantee the stability of the Euro, backed by the determined stance of Germany and France. To this end, it is of course a priority to alleviate the imbalance which exists between member states.
That the Euro should be used both by strong and weak states poses a serious risk. However, today no one would be strong enough to raise the entire Eurozone to the same level of development. Also, for the crisis not to repeat itself and for the protection of the Eurozone, European institutions need to act with more coordination. In other words, it is certain that lacking better coordination in Europe’s economic policies, a union cannot be established over the European currency. Of course, for some EU countries, that a joint economic policy be implemented throughout Europe and that the entire system should be under the control and regulation of Brussels is not an attractive proposition. For most countries this was an unpredictable outcome.
However, according to Jose Manuel Barroso, European common economic management may be the last answer to the crisis. The crisis within a crisis caused by Greece has made common economic policy and management a necessity due to a number of reasons. The EU needs to display that it is a disciplined group as soon as possible. Everyone including the markets and the EU’s trade partners want to see solidarity and collective behaviour in the EU. Among those diagnosing this difficult condition is the International Monetary Fund (IMF). Announcing its 2011 forecast, the IMF said that “there are significant risks which could disrupt global recovery”. This warning comes with the adage that “the national debt crisis in Europe may spread to other regions or the real economy”. The EU needs to rapidly support the Euro in 2011. In the first half of 2011, the EU needs to relax its savings measures and spur increases in production and therefore employment.
Expectations in this line are growing within the EU. Indeed, according to data announced by the European Commission, the confidence index which stood at 105.1 points in November 2010 rose to 106.2 points in December 2010, its highest level since October 2007. The main factor in this rise was optimism on the part of German manufacturers. According to Euronews’ reporting, the Euro losing value by 8.8 per cent against the dollar in 2010 has increased the competitiveness of exporters.
In the data announced it can be seen that Germany and France have become separated from other countries in that they are showing signs of certain steps towards recovery. Another report has displayed that while consumer sales had dropped by 0.8 per cent in October and November 2010, the Christmas and New Year season has been good for the retail sector.