Nataly Kambur
This is going to be a decisive year for the entire European union and the Eurozone. Starting from the next month and through September 2017, we are going to see a series of elections in France, Germany and the Netherlands. International experts say that those elections will decide the future of the common European currency as we know it. By the way, Italy may also hold a similar election in late 2017.
Amid such an uncertainty, the Eurozone’s key participants are already taking steps to secure themselves against possible financial misfortunes. Stratfor experts have just released a report explaining the existing and future risks for the Eurozone.
The Italian government seems to be hanging by a thread. However, whenever the government decides to hold an election, almost half of the electorate seems to be supporting the parties willing to quit the Eurozone for good. If that’s the case, this is definitely going to undermine international markets, not to mention Eurozone economies themselves. The worries re going to grow over time. The thing is, some representatives of the Democratic Party of Italy claim to have created a whole new party. The National Front of France is also planning to hold a referendum to quit the Eurozone.
At the same time, the experts believe that no Grexit (stands for Greek exit) will seriously affect the Eurozone’s stability. Still, the Grexit has become more probable today. Athens promised to implement the unpopular economic reforms required to get another tranche from the lenders. Some of those reforms touch upon very sensitive questions, which may trigger social instability on Greece. At the same time, the coalitional government now represents an insignificant amount of seats in the Greek parliament, which is another major reason why the current government may collapse. An early election in Greece may turn into a referendum to quit the Eurozone. While Greece owes most of its debt to international lenders, a Grexit is not expected to become something challenging for the Eurozone unlike something it could have been5 years ago. Anyway, this could create the sol-called domino effect and spread over other Eurozone members like Italy and Spain . if happening shortly after the Brexit, the Grexit may cause instability in the Eurozone and even affect the forthcoming elections.
This is why some Eurozone members have already started studying alternatives. For example, not so long ago, the Netherlands started studying the relations with the Euro. The thing is that the local authorities are worried that the ECB’s policies may seriously affect Dutch pensioners and bank depositors. The recently started research is expected to clarify the situation an even to provide the ways to quit the Eurozone with the least amount of pain possible. The very fact that such research was started indicates how serious the governments are about the problem. This also means that they do believe in the likelihood of a Eurozone crash. For now, the political and financial future of Europe seems to remain unclear.
Nataly Kambur
