On saving Eurozone: Unanimity is the key

As of the first quarter of 2013, Britain has started recovering from the economic collapse. With the growth in housing market and consumer spending, a flicker of hope emerges. But after the international bailout negotiations in Cyprus this March, negotiations that attest an economic demise, the crisis in Eurozone has been – again – the talk of the town. The crisis in Cyprus is  indeed grave because capital controls have – for the first time – already been introduced just to convince investors to make their money stay. Of course these have serious repercussions such as making the citizens believe that it is now almost impossible to save the Eurozone. As usual, the good news has been overshadowed by the bad news. Because of this, instead of seeing and thinking of contributing to the efforts in saving the economic conditions of Europe, the citizens, and even people beyond the continent’s boundaries, wonder which country is next to face the same misfortune.

Larry Elliot, the economics editor of The Guardian, analysed the said economic issue. He brought up the reasons behind the fiscal failure and provided some points – based on his perspective – on how to prevent another Eurozone crisis. The first problem, he noted, is the lack of effective attempts to resolve the problem from other members of the Eurozone. According to Elliot, instead of uniting for a purpose that would benefit themselves individually and as an entity, they only defend hemselves by issuing statements saying they are not going to be the next Cyprus.

Elliot emphasizes the need to recognize the flaws of the current fiscal policy. If the members of the Eurozone keep on speaking independently about this issue, then it is the same as denying what is really happening and how this is going to be an inevitable domino effect. Then, like the usual way of facing any type of dilemma, it is better to start with acceptance. It is easier to have a more open mind and see the important elements of a problem when the situation is fully accepted. I am sure that in this ongoing economic crisis, with genuine acceptance, it would

become easier as well to be aware of and to acknowledge what is faulty with the policy. But of course, this does not happen overnight. As Elliot says, European countries should be given more time to set everything right, especially bringing public finances in order. He suggests that they should concentrate on structural shortfalls instead of general budget deficits. More than this, Elliot says that what should be done immediately is the creation of a banking and fiscal union. According to him, the economic collapse of Cyprus could have been prevented painlessly had there been pan-European bodies which could have recapitalised the banks.

Elliot has an interesting and keen viewpoint on this persistent economic issue. While all of his suggestions and recommendations are helpful, I will still deem that presently the most important factor that could save the Eurozone is the presence of harmony among the members. Elliot is totally right in saying that what Europe needs now is “one voice”. Some economists and analysts say that in the present state of affairs for the Eurozone, it is only God who can save it. I will claim it can be salvaged down here on earth if the Eurozone countries establish proper communication among themselves, and think and act – even just this once – as one.

Knut Harald Nylænde is a Norwegian entrepreneur and investor, who presently holds the Chief Executive position in Moxie AS, a group of investments companies in Oslo.