The scene of the crisis beleaguering the European economy is a belated repercussion of the financial crisis that marched into Europe from the West Bank of the Atlantic. The European economic drama thus appears as though it were an American vendetta against a competition that goes back to the beginning of the third millennium, when the countries that had been, until half a century ago, concluding generations of deadly hostilities and bloody violence with millions killed, were united. Recall that the ‘bereaved continent' had not managed to recover from those aeons of violence except with the help of the United States, which provided financial assistance to resuscitate Europe from the abyss of war and misery. However, the U.S rescue plan [for Europe] became a bridge that linked those countries and then turned into a union that is more geostrategic and economic than political, and which was later to be known as the European Union. The latter brings together 27 states from the west, centre and east of the continent, and joins together its Mediterranean bank with its bank on the North Sea, and also its eastern parts that had been hitherto under communist rule that did not help them much develop in tandem with the more economically, socially, technologically and even culturally advanced western parts. The European economic developments, while representing the other side of the crisis, may be indicative that the crisis's repercussions will soon hit the entire planet including China, where there are concerns regarding the real estate bubble, the slowdown in exports, and the decline in the surplus of its much relied-on trade balance. According to the OECD, China is expected to achieve a growth rate of 11 percent this year, but which will decline to 8.5 percent next year. These European repercussions are epitomized by the wave of vulnerability affecting the member states of the euro zone, which includes about two-thirds of the EU countries, between actual member states and others wishing to accede. In the forefront [of counter-measures], there are the austerity plans adopted by governments in the European Union, and which were initiated by Greece and then Spain, Ireland, Portugal, Britain and Italy. This does not mean that other members, too, did not reduce government spending in their budgets or that they did not desire to, especially when the main problem affecting the euro zone is not restricted only to the issue of budget deficits exceeding the 3 percent level specified in the Lisbon Treaty, but also includes that of the sovereign debt threshold. Despite the fact that Spain had achieved a surplus in its budget, its public debt -in particular household debt which exceeds 103 percent of the GDP - is the primary cause of its present financial crisis. These developments have weakened confidence in the unified European currency, and also in major currencies such as the British Pound and the Swiss Franc, especially versus the dollar and the Japanese Yen. At a deeper level, there are other concerns: if the European rescue plan valued at nearly a trillion dollars failed to boost the European economy, and if the U.S Federal Reserve stopped supplying dollars to the European central banks within the scope of the ‘liquidity swap lines', Europe and the euro zone might resort to issuing currency uncovered by economic activity, which would lower its value at the euro zone level. Inevitably, these disturbing conditions are prompting the second generation of European politicians and officials, especially in the euro zone, to take protective measures that were hitherto unheard of among the [euro zone] founders, who of course were not well-versed with the complex financial instruments that led to the collapse of mega financial institutions, and destabilized countries that hitherto had stable economies. For this reason, Germany imposed a temporary halt on short selling of all types of bonds, and the European Commissioner for Internal Market and Services proposed imposing levies on the banks to feed a ‘Crisis Fund' (opposed by France and Germany), since “the financial sector must bear the cost of crises in the banking sector in the future” and not the taxpayers. This proposal was raised in conjunction with the request by the finance ministers in the European Union to exercise stricter control on budgets and to adopt austerity measures in spending. However, this threatens growth, unless spending adheres to the limits of austere expenditure and a somewhat creative balance. The high level of public debt that is reaching critical levels is threatening the European economy and subsequently, the world economy, because of the sheer weight of the continent at the level of commerce, services, aid, innovation, and other basic components of the global economy. According to the European Commission, the Greek debt will total about 137 percent of its GDP in 2011, while Italy's debt will reach 118 percent, Ireland 97 percent, Portugal 95 percent, France 84 percent, Germany 80 percent, and Spain 67 percent. Moreover, it is not only governments that are accused of having exorbitant debt: banking facilities and moderate interest rates have also helped individual and corporate debt dramatically exceed public debt levels. For example, the former have amounted to 190 percent of Ireland's GDP at the end of 2009, and 163 in Spain, 160 in Portugal, 98 in Germany, 91 in France, 90 in Italy, 80 in Greece, and 61 in Belgium. For this reason, the crisis proves that the founders of the euro zone overlooked the fundamental loopholes that are now the cause of concern for their successors, and it may be better for the future if these are dealt with, and subsequently, the foundations of the euro zone and the European Union are reinforced.
