Editorial
Eurozone bailout fund
The need for Greece to take initiatives
The dust has yet to settle on how the EU is going to resolve the Eurozone debt crisis. French President Nicolas Sarkozy, on a rare Television appearance stated clearly that admitting Greece to the Eurozone in 2001 was a mistake to begin with and that the EU is now having to pay for the consequences.
The French President continued to state that Greece entered into the Euro with false numbers and that its economy was not in any way ready to assume the integration into the Eurozone. In an agreement between the Eurozone countries this past week, it was decided that the Greek debt will be cut. The decision was also to recapitalize European banks and inject more than double the European bailout funds in order to prepare for future possible defaults.
The emerging economies, the BRICS group--Brazil, Russia, India, China and South Africa has voiced a willingness to help Europe overcome its debt crisis in order to avoid a global recession.
The most significant player is undoubtedly China from whom the EU has asked for a three trillion Euro aid package. China has 60% of global reserves, but obviously, its support will depend on Europe's stability and ability to guarantee the safety of its investment.
There are certain important questions to consider here. Greek national banks will receive a bailout package but what of the private sector? Greece must rise up as a worthy member of the EU not only through loans and bailouts but more so through its own economic growth and productivity, factors which perhaps were lacking in the past.
If the EU concentrates solely on bailout packages for Greece and does not insist on Greece's own initiative to stimulate growth, the heart of the problem will hardly be resolved and the risk of EU countries needing bailouts on a regular basis is likely.
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