...adding hastily that his pro-euro attitude was not based on any ideology of deepening EU integration. He is not the only one in his country who became suddenly enthusiastic for the euro; a poll showed that 70% of his fellow-countrymen agree with him.
But not only Poland makes eyes at the Euro. In Iceland, a non EU country, 73% want to swap their Krona for the euro and at the same time 69% like to enter the EU. Of course membership of the Eurozone offers no solution for all financial problems. As an EU member, Iceland would still have a crisis but interest rates would be 3,75% and not 18%.
Besides Poland several other EU countries planned in the past to stay outside the Eurozone: Sweden, Denmark, Hungary, Czech Republic and of course the UK. The Danes for instance, unlike the British, never cared about economic independence. Denmark participates voluntarily in the euro system and shadows the European Central Bank; the anti-euro attitude was just political window dressing. But now the Danish Central Bank was forced to raise interest rates to 5,5%, a full 1,75% higher than the ECB rate!
For Hungary the crisis became a catastrophe. The country has to pay the price for his ‘independence’ in the form of an IMF-imposed austerity programme at a time when the economy is shrinking. “The lesson is that Eurozone membership offers, apart from lower interest rates, a joint policy framework and protection from speculative attacks. In good times few people care, but these are not good times”, concludes Wolfgang Mόnchau in his weekly column in the Financial Times.
It is clear that the Eurozone brought stability to the economies of its 15 members and during the crisis the Growth and Stability Pact, alongside the Eurozone, kept Europe in a better shape than the US with its record deficit.
EU-Russia relations back on track
EU leaders decided on September 1 to postpone talks with Russia on a long term partnership agreement in protest of the too heavy reaction of Russia on the Georgian attack of the country. In the meantime, not surprisingly, Germany has deepened its Moscow bonds; neither the Germans nor the Russians see much reason why their business connection should do anything but grow stronger. Germany is Russia’s biggest foreign trading partner while exports to Russia are vital to the continued flowering of small and midlevel German companies.
Not only Germany but also France, Italy and other western European states have pressed for a return to normal EU-Russia relations. These relations were tested again when Moscow announced the deployment of missiles in Kaliningrad, near Poland and Lithuania, to counter planned US anti missile defences close to the Russian border in Poland and the Czech Republic. Germany said this move underlined the need to have a dialogue with Russia.
After new accounts by independent military observers came available and called in question the Georgian assertion that it was acting defensively against Russian aggression, despite the usual criticism of Moscow by the former communist EU member states, 26 EU foreign ministers agreed with resuming talks with Russia. The 27th foreign minister, from Lithuania, was not present, but a Foreign Ministry official who attended the meeting said: ‘In our opinion the renewal of talks at this time is a mistake’…
