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Will BRICS Save Eurozone From Crisis?

13 January 06:56 AM

The eurozone is on the verge of collapse. Another attempt to resolve the crisis has failed. The multiple loans generously provided by the IMF, the EFSF and the World Bank to the sick eurozone economies of Greece, Portugal , Ireland hasn’t made a miracle.

Brussels seems to be ready to accept aid from anywhere, even from those countries that are not its allies or friends to, say the least. One of them are the so-called BRICS states (Brazil, Russia, India, China, South Africa).

All of them are united by the dynamic pace of economic growth and considerable stabilization funds. Till autumn 2011 the EU was rather skeptical about BRICS. French, British and German mass media would often assault and criticized the informal union, its members and their relations. Later the situation changed when Brussels had to come back to earth and ask BRICS for help.

Autumn promises: How can BRICS help the eurozone?

As we have just mentioned, the BRICS countries can boast considerable gold-and-currency reserves. If combined, these are the world’s biggest reserves. China alone has accumulated a total of 3.2 trillion dollars. The biggest share of BRICS’s stabilization funds is represented by the Euro currency. This is what the EU authorities count on. For example, Russia stores 30-45% of its currency reserve in EUR. Brussels motivates BRICS by saying that in case the eurozone collapses this will be a devastating blow for their reserves.

Anticipating the EU’s intentions, the BRICS members were careful in their reaction. There was no common opinion. The main hope was laid on China as the EU expected it to contribute to the EFSF. China, as always, would make some ambiguous statements, saying it wishes the eurozone would be stable. Brazil, Russia and India were determined to help only specific eurozone economies (most successful – France and Germany) through the IMF only, not through the EFSF.

Later, during the G20 summit, which took place in Cannes in early November 2011, Europe was expecting financial aid without any conditions and gave everyone to understand that it would not tolerate patronage or moralizing. The rest were eager to teach the Old World a lesson and to express their own opinion on the EU’s financial policies of the recent years.

For example, Dmitry Medvedev, President of the Russian Federation, underlined that Russia was ready to help the EU through the IMF and that being a part of Europe, Russia was concerned about the situation in the EU and had the right to express its own standpoint.

Hu Jintao, President of China, was sure that the EU had enough strength to overcome the crisis while the rest of the world could help it.

Winter disappointment:

According to Eugene Olkhovsky, Masterforex-V Academy’s leading expert from Canada, today we can say that most of those hopes start disappearing.

BRICS’s fair promises haven’t still been converted into long-term loans or big-scale investments in the EFSF or European bonds. So far, China has been the only BRICS member that gave to understand that Europe shouldn’t count on any financial aid from China. The only thing they could do is to purchase a certain share of European bonds. Other BRICS states remain silent but that doesn’t matter anymore because without China their help will be inefficient.

Why did BRICS change their plans?

There can be a number of reasons, Masterforex-V Academy experts say:

· European countries try to avoid reforms and austerity

· Some experts believe that it will be next to impossible to cure the eurozone economies in the near future, which turns any financial aid into a waste of money.

· Europe doesn’t want to sell its most precious assets.

· BRICS can have their “personal” reasons, including internal problems and concerns (for example, the forthcoming presidential elections in Russia and the change of power in North Korea, China’s neighbor and ally)

EURUSD:

The experts of Masterforex-V Academy anticipate the following succession of events (as shown below):

Market Leader and Masterforex-V Academy would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:

Will BRICS eventually help the eurozone?

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European Natural Gas Crisis: Natural Outcome or Russia’s Game?

Natural gas import is still a major concern for the EU, especially this winter, which has been extremely cold. As a result, the consumption of natural gas in Europe has grown significantly, thus revealing a whole bunch of problems, including supplies and prices.

So, let’s have a closer look at the current situation in the European market of natural gas.

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Publication date: 17 February 10:14 AM

A couple of days ago Willem Buiter, Chief Economist of Citigroup Inc., introduced a new notion – “rublezonefication”. According the Western mass media (Bloomberg, The Guardian, The Financial Times, The New York Times, Forbes etc), the respected economist used this notion to describe the future of the eurozone.

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The thing is that not so long ago the ECB provided the national banks of France, Italy, Spain , Austria, Portugal , Ireland and Cyprus with the abovementioned freedoms. Despite the temporary nature of these steps taken by the ECB, Mr. Buiter assumes that the eurozone members may eventually go back to their national currencies.

Is the eurozone really in trouble?

Publication date: 17 February 05:30 AM

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No wonder that there are many supporters and adversaries. Each party has weighty arguments.

As we know, last year nuclear energy became a special concern for the entire world. The Fukushima meltdown in 2011 (as the result of several earthquakes and tsunamis) reminded everyone that nuclear energy is as dangerous as powerful.

Shortly after the disaster, most nuclear countries started emergency testing of their nuclear power plants to find out whether they are safe enough. Some of them decided to abandon their nuclear plans.

Now let’s have a closer look at the results of such policies and the prospects of nuclear power engineering.

Publication date: 16 February 08:31 AM

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Germany and France, 2 economic locomotives of the debt-ridden eurozone, didn’t quit the currency union despite expectations but made another (the last) warning to the other eurozone members, thus reminding them to maintain budgetary discipline and forcing them to sing a “fiscal plan”.

Publication date: 04 February 02:20 PM

Investment news, Great Britain. Europe has introduced a number of surprises, not all of them being pleasant for investors. First of all, there has been a powerful debt crisis, which has resulted into the most large-scale problems ever faced by euro zone.

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Publication date: 03 February 08:43 AM

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Publication date: 25 January 06:11 PM

On January 1st 2012 Denmark started its presidency of the EU Council. A small Scandinavian country is now in charge of the unofficial EU cabinet of ministers. Yet, this is one of the most dramatic periods in the history of the EU, when the very existence of the union is under threat.

What should we expect from Denmark ? What are the country’s ambitions and priorities?

What is the presidency of the EU Council?

According to the experts of Masterforex-V Academy, the EU Council and the European Parliament are the EU’s major authorities (all in all, there are 7 institutions).

Each EU member has a right to preside over the EU Council. It is done by turn, yet there is no exception, regardless of economic potential, size, period of being an EU member etc. In 6 months Denmark will yield power to Cyprus . Denmark has presided over the EU Council for 7 times since joining the EU.

Publication date: 05 January 05:15 PM

Forex news. Euro rate.
Psychologically, it is very hard to be a leader of the nation, whose neighbours and partners consider it to be the nation of idlers. This might have been the reason why ex-Premier of Greece Georgios Papandreou has made a decision to quit the post of Socialistic Party leader and take no part in the up-coming elections.

Publication date: 05 January 09:31 AM

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