It’s been 4 years since the latest global financial crisis. Some EU countries have found themselves in a difficult financial situation once again. Strikes and demonstrations in Greece, Cyprus , Portugal , Spain , Ireland, Belgium, France and other European states indicate that the unpopular austerity measures implemented by local governments are too painful and inefficient. It seems like the EU has got in a spiritual crisis.
However, the most terrible thing is that the EU and the eurozone seem to have failed to find really efficient solutions. At this point, the European unity and integrity along with the common European currency are in jeopardy. Will the EU authorities manage to save the eurozone integrity by helping Greece, Cyprus and other needy eurozone economies? Let’s try to answer these questions together with .
Eurozone: Past and Future
The prolonged eurozone crisis started in 2010 was a natural outcome of the preceding global financial crisis. Some European economies saw major imbalances in their financial systems. The common Euro currency declined against other majors.
Still, some experts say that the eurozone crisis should be considered as the start of another major crisis. First of all, the public dents of some European countries are not as big as the debts of some financial institutions, which may well provoke another crisis similar to the one we could see in 2008.
Secondly, the crisis in Europe resulted mainly from the internal peculiarities of the integration development within the EU and the eurozone:
EU and eurozone members are essentially different in many aspects, including economic development. This makes it next to impossible to conduct efficient economic policies.
The economic and currency union has multiple fundamental contradictions. Out of all the elements of the European economic policy, only the money-and-credit policy is unified.
As for the eurozone, the tendency to accumulated excessive public debts started long before the crisis.
The European integration keeps seeing considerable obstacles amid ineffective antic-crisis measures, which provoked a crisis of confidence. International lenders do not trust risky economies anymore and question the pan-European governing.
The situation in eurozone economies differs dramatically. Even if to take into account all the risky southern economies of the eurozone, the really critical situation can be seen only in Greece and Cyprus . The crisis has suspended the eurozone and EU integration and expansion.
The eurozone crisis is a major concern for Russia and its allies in Eastern Europe and Central Asia. On the one hand, it is about the Russian-EU relations. In particular, there are threats of getting less considerable income from the Russian export of energy carriers. On the other hand, Russia and its CIS allies can learn a valuable lesson from the European integration.
As for the Russian Ruble, its exchange rate versus the US Dollar may be revised as well. The forecast for 2013 is 32.4 rubles per dollar.
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Euro Prospects: How Efficient Are Antic-Crisis Measures?
Most Western analysts keep saying that the existing eurozone crisis is not that serious. They say the EU ahs enough intellectual potential to find efficient solutions. Moreover, the current debts of those risky eurozone economies are not as considerable as the debts of those financial institutions that provoked the 2008 global crisis.
The very fact of the timely mobilization of European experts and politicians for working out and implementing efficient anti-crisis measures looks more important.
At the same time, the currency market shows another point of view on the problem. According to Igor Zotov, an expert from , the Daily chart of EURUSD keeps showing the development of wave B inside a new bullish ABC pattern of a bigger-scale wave level.
However, at this point, we lack conditions for a trend reversal on the H4 level and higher:
As we can see, there is a certain bearish ABC pattern that belongs to a big-scale wave level. A break below 1.28818 may initiate another downswing. Therefore, it is better to go bearish on H4 if there are all the necessary conditions. It is recommended to monitor the situation on the H4 chart till the end of the week.
