Goodbye euro, hello guilder, mark, franc, and lira?
It seems to be the topic of discussion on the news every day: the European crisis. Are there any solutions and can we maintain the Euro? EM asked several students what they think will happen to Europe.
Quentin Couturier, second-year IBA student (from France)
‘It’s hard to say what will take place in the next few months. Nobody predicted that Italy would be the trendy topic right now, but it still is. The only thing I can say for sure is that the crisis is not over yet. Moreover, the short-term focus should be on Spain, Portugal and Italy. I don’t think France is going to be a problem any time soon.
There was some commotion a few weeks ago. Standard & Poor downgraded the credit rating of France by mistake to a double-A status. All the French politicians were furious and wanted to sue S&P. However, a French economist claimed that France lost its triple-A status a long time ago. Especially if you compare the situation of France with Germany – they both have the same ranking – there is a big difference in their debt situation. Yet, I am not afraid France will turn out to be the new Italy. I surely hope not, because then we would be in very big trouble. If France would fall, I don’t think we would be able to maintain the Eurozone. The richer countries cannot save all the other European countries.’
Maria Tabacaru, master student Finance & Investment (from Romania)
‘Currently we are in the second peak of the crisis. A rearrangement of the economic power of the world is taking place. America will not have the same power after this crisis. However, one should also focus on China, because there are a lot of bubbles going on there. For example the real estate, those prices are rising fast. If China’s economy would face a downturn, it would take America and Europe with them.
However, in Europe the focus should stay on the southern countries, such as Greece, Italy, Spain and Portugal. The main problem in some of these countries is the power struggle. The focus of the politicians is to get the power, not to solve the problems. Moreover, in some of the countries corruption is still a concern. These political issues should be solved first. Only when there is a stable political situation, a stable economy can be established.’
Frederica Romaniello, first-year IBCoM student (from Italy)
‘I only left Italy at the end of this August, so I experienced the crisis when I was home. For example, during the summer I always spend some weeks at my grandparents’ house in the south. Until a few years ago, there was a flux of tourism from outside and within the country. However, the last few years the amount of tourists has decreased. This shows that people are spending less money on luxury goods as holidays.
The problem in Italy is that the government tried to convince the people that the euro crisis was a phenomenon of outside the country. It didn’t affect Italy. The situation we are in right now is a very complex and delicate one. One of the problems is the high unemployment. It is hard to say what to do to change the situation. The fact that Berlusconi resigned could be a good start. I personally am very happy about that. Berlusconi was a bad representative for our country; he gave Italy an extremely negative image. Of course we have to wait if things are really changing now, but I hope the image of Italy will improve.’
Bing Liu & Rui Yuan, master students Supply Chain Management (from China)
‘For us the crisis is very beneficial if you look at the exchange rates. Of course it is also a danger for China, since it is important for the trade to have a stable Europe. We think Europe cannot solve this problem by itself. It should accept help from a country as China. This might bring some considerations, because it could increase the political power of China within Europe as well.
The priority on the agenda of Europe should be to save the Eurozone and its currency. The convenience of having the same currency goes further than the trade benefits. It also benefits tourism, not only within Europe, but also from outside Europe.’ JV