NEW YORK (ForexNewsNow) – In an editorial published in French newspaper Le Point, former French President Valéry Giscard d’Estaing (from 1974 to 1981) outlined his opinion on the current global debt crisis.
According to Giscard d’Estaing, the European decline forecasted by many analysts is supported by three main arguments:
- The large public deficit in many European countries.
- Weak growth rates for European countries in comparison with emerging countries.
- High unemployment rates.
In addition, he adds two more psychological points that should be taken into account:
- The inefficiency of European political institutions.
- European citizens’ loss of confidence in the future of the EU (a recent poll showed that one in three Germans believes the euro could disappear within 10 years).
How can this be addressed?
Giscard d’Estaing believes the European Union needs to a become a simpler, more solid and understandable organization advocating regular meetings between government heads, tax harmonization for companies and a supervision structure for sovereign debt.
Moreover, Europe needs to give countries who wish the opportunity to leave the euro zone and keep their own (weak) currency.
If Angela Merkel and Nicolas Sarkozy took these decisions, he says, it would be enough to end most of the international speculation on the viability of the EU in wake of the sovereign debt crisis.
The US responsibility in this crisis
In Giscard d’Estaing’s view, the fears of a US recession will keep the financial markets volatile. The ball is Washington’s court and the American government is the only one able to enact a recovery plan. Giscard d’Estaing notes that politics in the US is at the heart of the possible resolution of the crisis.
Still, Europe has a role to play by distancing itself from a unregulated financial globalization. The current global financial situation has already shown its limits in the fact that few predicted the current crisis and there is still a lack of a concrete solution to end it.