I sincerely thought that Bill Clinton would be the next Nobel Peace Prize, because the political gesture would be inline with the status quo, but times are dire in the eurozone — or “Euranic” as I prefer — and the condition can only be appreciated by the latest move that left most people stunned. The Nobel Peace Prize 2012 was awarded to European Union (EU) "for over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe," according to the Nobel Prize website. Not an individual that has spent a lifetime fighting for human rights, but rather a political union — a portion of a continent. It goes without saying that Alfred Nobel never envisioned this outcome, and his testament reads in part as follows:
“The said interest shall be divided into five equal parts, which shall be apportioned as follows: /- - -/ one part to the person who shall have done the most or the best work for fraternity between nations, the abolition or reduction of standing armies and for the holding and promotion of peace congresses.”
Nobel’s will states “the person,” not the country, organization or group. It may seem petty to be picking on this issue, but this is a case of trying to rally the troops even as the enemy continues to advance, and the certainty of defeat becomes clearer by the day. Let’s not forget that the common currency is the reason why Europe is not at war — or so it goes. The Nobel Peace Prize was turned into a call to unity only because the bureaucrats know full well the true condition of the experiment. Angela Merkel highlighted the concept.
Commenting on the decision by the Nobel prize committee to award the peace prize to the European Union, Merkel said "the euro is more than a currency because in the end it is foremost about the original idea, the idea of Europe as a community of peace and values."
But four days later Merkel added a spoonful of sobriety and reflected on the reality on the ground.
Given that the underlying causes for the crisis have been building up over many years, it will take also many years to overcome the crisis, the chancellor cautioned. "We cannot overcome it with one big bang," she insisted.
If the European debt crisis has escaped you, the following video published by The Wall Street Journal on January 4, 2012, provides a good overview.
In it, Alessandra Galloni, Southern Europe Bureau Chief for The Wall Street Journal, delivered the key phrase that I’ve been selling for as long as I can remember, while pointing it out as the root problem of the crisis.
“The deeper effect of the European debt crisis is that it will eventually lead to a profound revision of Europe's cherished welfare state.”
On May 9, 2010 the European Financial Stability Facility was created to ensure financial stability across Europe, and Greece was the first in line, receiving a €110 billion loan. Almost 2-1/2 years later Greece is still in a deep economic black hole, and austerity was the purported medicine that hasn’t cured the disease.
While unemployment in Greece and Spain is projected to be above 25% in 2013, the underlying reason to remind citizens that peace is of the utmost importance was voiced at the recent International Monetary Fund and World Bank annual meeting by Klaus Schwab, the founder and executive chairman of the World Economic Forum.
"The financial crisis may be followed by an economic crisis, which may be followed by a social crisis, with increased unemployment," Schwab said. "My fear now is the social crisis will be followed by an intergenerational conflict when the younger generation discovers we are solving the situation by loading the debts on the next generation."
Saddling the next generation with debt is a concept that we know too well, and while we continue to trade stocks, currencies and commodities, we must do so with a complete appreciation that the economic ailments are far from resolved, even as recent economic data in the U.S. provides a gleam of hope for some, and a complete lack of understanding by others that continue to tout that the worst is over.
Certainly the talk of exiting the euro will continue, be it by the southern or northern members, but let’s not forget that the damage has been done, with Der Spiegel reporting on the big picture.
A new study by a German think tank warns that a euro exit by Greece, Spain, Portugal and Italy would cut global GDP by 17 trillion euros and plunge the world into recession, with France suffering the biggest loss.
And that is based on the best case scenario, conforming with the recent norm that always turns out to be abnormal.
By. Carlos X. Alexandre