EU confusion blocks Spanish bond buy-in
“We are waiting for the European countries to announce a specific and comprehensible strategy to come out of the recession. If they need Russia’s aid or the help of the BRICS countries, we are ready to offer it,” Dvorkovich announced, speaking to journalists at the Millennium Development Goals forum on Monday.
However, he pointed out the existence of a clear strategy in the EU is a precondition for any help Russia may deliver.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said on Sunday that a comprehensive response to the debt crisis would be finalized by the end of the month, including a detailed plan to ensure European banks have adequate capital.
The EU's current president Herman van Rompuy has delayed next week's EU summit till October 23. Accodring to van Rompuy, additional time is needed "to finalize a comprehensive strategy."
World stock markets, however, perked up on Monday after a weekend meeting of the leaders of France and Germany provided a promise of action on Europe's debt crisis. The Italian stock market was also up.
Earlier on Monday Russia’s Foreign Minister Sergey Lavrov and former Finance Minister Aleksey Kudrin met with Elena Salgado, Spain's economy and finance minister at the Millennium Development Goals forum in Moscow. They discussed whether Russia will be involved in buying Spanish debt.
Greece meanwhile awaits the next tranche of 8 billion euros, about to be released by mid-November or the country will run out of money.
EU has hard time withstanding the crisis by itself
As the European crisis unfolds, fears are rising that stronger EU economies will not be able to weather this financial storm.
“At the end of the day – and that day might not be far away – even a country like France and also certainly Germany can become a country in financial trouble or, to put it in the language of the rating agencies, both countries might loose their AAA rating,” warns Johan Van Overtveldt, author of the book "The End of the Euro".
He told RT that EU has only two major solutions: either it will shift more budgetary and financial decision making to European level and thus improve the credibility of the integration process in the eye of the market or it will discard the euro as a pan-European currency.
Dr. Richard Wellings from the London-based Institute of Economic Affairs says there is no other solution at this stage than the dissolution of the Eurozone.
“Eventually, if the bailouts carry on going up and up, this may undermine even the most powerful economies in Europe, such as France and Germany,” he told RT, “I don’t think this is the answer. I mean, politicians and bureaucrats there… their main priority is to avoid taking the blame. So, all they are doing is kicking the can down the road.”
Wellings notes that the current state of affairs is now being complicated by the reaction from ordinary Germans, who have to bear the weight of the present crisis on their own shoulders.
“I do think that German public opinion is hardening and of course German taxpayers, or German savers, are the real victims of these quick fixes,” he said. “So, when the European Central Bank prints money to make unofficial bailouts of Spain and Italy, as it has to, and of course people with savings in euros – they are the ones that suffer from that. And of course, the problem is that German taxpayers are going to be on the hook, not just Greece but potentially all the other southern European countries.
“So, really, the long-term solution is an orderly dissolution of the Eurozone, probably starting with Greece,” Wellings concluded.