Ottoabasi Abasiekong: Debt Management And Economic Sustainability (16)

Wednesday 24th of October was another crucial day as far as the future of the ‘eurozone’ was concerned as the President of the European Central Bank (ECB) Mr Mario Draghi met with German Lawmakers over his decision to approve the bond-buying of ailing nations like Greece, Spain, Portugal, Ireland, and Italy.
The German parliamentarians are sceptical about the Draghi plan eventhough their amiable Chancellor Angela Merkel supports the move, reason is the plan would ease the responsibility the ailing axis ‘PIIGS’ Nations have to take in ensuring that they implement the austerity cuts in their countries.

Well the Bavarians have the right to probe the ECB plan because they are the major contributors to the European Financial Stabilization Fund (EFSF), from where the ‘eurozone’ draws its funds to rescue and assist debt plagued member states in the economic zone.

What are the fears? First, the German lawmakers are concerned that the rising inflation trend in the ‘eurozone’ if not contained could impede growth prospects not just for Germany but other stable member states which would not be helpful either to the debt-stricken nations.

Second issue is that Germany the ‘Hope of Europe’ has for the sixth time in economic projection failed to hit a favourable growth index according to CNN Business economic report, this has not been a good trend for the ‘Giant Industrial Nation of Europe’ at the moment and this is also the situation for every member of the ‘Eurozone’, which creates concern for the timing of the Bond—Buying.

Third Issue with Unemployment rising at an above 22.8% high in the EU there is a lot of concern over Germany, because if the tide rises in ‘Deutschland’ it could spell danger for Madam Merkel and she would obviously do everything within her power to contain that tide rise, which means Funds flow commitment may be held up if it happens, because the Germans believe a Strong domestic economy is their strength.

It is really complicated because the Portuguese, Greek, Spanish, Italian and Irish Leaders are increasingly under pressure to meet conditionalities for more assistance from creditors and that means pledge to more ‘Austerity’ measures while scholars and the IMF have stated in an ‘Ideal’ case that pushing ‘Austerity’ will worsen the predicament of the debt-plagued states.

Professor Joseph Stiglitz the Noble Laurete and distinguished Economist at a recent conference of the Organization of Economic Cooperation and Development, according to Bloomberg news report clearly stated that Greece and Spain are in a depression economic level and sees ‘significant risk of continuing turmoil’ in the region .

Another definite blow to the ‘Euro’ will be a slide in the German economy and it is perceived that the leaders are taking concise precautionary steps to ensure that the crisis situation in the region does not blow its potency as an economic power to reckon with and the clarifications of Mr Draghi is needful at this time.
What’ the way forward for the ‘Eurozone’? If they take the Biblical ‘To thy tents oh Israel’ some countries will be in a worse state and regret ever joining the regional economic zone, which was the toast of the globe in terms of regional integration at inception.

One will be a clear commitment to the supervised banking policy to be shaped by 2013 an unfortunate situation because the member states except the Uk will have their budgets vetoed by the regional leadership a loss of economic sovereignty.

Another will be a collaborative effort between Germany and the ECB , that the Bavarians will have to understand that the debt plagued nations are not avoiding austerity adoption, but need time as the various levels implemented has heated their polities and further implementations could be unbearable.

On the part of the ECB and member states , they must come to the understanding that ‘He who pays the piper dictates the tune’ which invariably means Germany’s interests must be taken into consideration, because if the Largest market in Europe should fall then we may likely say ‘Game Over’ for the ‘Eurozone’.
Apart from this, the Euro Leaders during this period need to engage intellectuals and the young economic focus groups to explore ways in which new innovative techniques and paradigms can be integrated into the ‘eurozone’ structure to drive growth and stability, beyond battling debt crisis and survival.

Japanese Prime Minister Mr Yoshishiko Noda recently directed his cabinet members to come out with a new ideas and strategies to stimulating growth in a country that also has a debt burden, wants to cut its deficit, and has been through the storm of devastating tsunamis and earthquakes.

This should also be one of the major points for American Voters come November 6, they need to vote the Man that will show prudence and proper management of the Nation’s debt profile, spending on what is needful for the Nation.

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