Crisis of Europe or Europe in Crisis?

Greece is assessed as always being the “bad boy” of the EU and being able to get away with any­thing. The devel­op­ments of the eco­nom­ic cri­sis were close­ly fol­lowed in Mace­do­nia, not only because Greece is the biggest for­eign investor in Mace­do­nia, with a share of 60 per­cent of total for­eign direct invest­ment (FDI) in Mace­do­nia, but also because Mace­do­nia want­ed to see how the EU would react: would it decide to “pun­ish” the “bad boy” or save it again? The debates most­ly focused on the over­all influ­ence of the sit­u­a­tion in Greece and how it would affect Mace­do­nia. Greece received finan­cial aid from the Inter­na­tion­al Mon­e­tary Fund (IMF) and the Euro­pean Union, but that does not mean that the author­i­ties’ headaches are gone. This also applies to Mace­do­nia, which is most exposed to Greek cap­i­tal, analyse the Mace­don­ian news­pa­pers.11Analy­sis by the dai­ly news­pa­per Utrin­s­ki Ves­nik, avail­able at: http://www.utrinski.com.mk/?ItemID=9EF45F0B1F055949806E35D5D5C35CE5 (last access: 3 May 2010). Accord­ing to the media, the Greek finan­cial cri­sis arous­es fear and anx­i­ety in Mace­do­nia.22Analy­sis by the Mace­don­ian Edi­tion of Deutsche Welle, avail­able at: http://www.dw-world.de/dw/article/0„5522196,00.html (last access: 30 April 2010). The ques­tion, which is cir­cuit­ing at all times, is: how big will the con­se­quences be and how will Mace­do­nia feel them? Hav­ing in mind that Greece is the biggest and most used port for exports, the con­stant strikes of Greek offi­cials had large con­se­quences on Macedonia’s inter­na­tion­al busi­ness as well. The Greek cri­sis did not have any direct con­se­quences at first, but Mace­don­ian experts, author­i­ties and busi­ness­men were care­ful­ly fol­low­ing its progress. Oth­er ques­tions which are addressed by the Mace­don­ian media are: “Why does the Euro­pean Union dis­cuss the bil­lions of Euros need­ed to pre­vail a Greek bank­rupt­cy? Why is nobody dis­cussing sanc­tions, when Greece has vio­lat­ed all stan­dards and pro­ce­dures? Why hasn’t Greece start­ed sell­ing its islands? Is it worth sav­ing Greece? What will be the effect on the whole EU? Who will be next?” The Mace­don­ian pub­lic believes that the EU pub­lic and author­i­ties should start ask­ing these questions.

The Mace­don­ian media wrote that the first wave from Greece was felt in the tex­tile indus­try. Some Greek com­pa­nies closed, sup­pos­ed­ly because Greece is bound to cut­ting expens­es and ratio­nal­is­ing its spend­ing. The remain­ing Greek com­pa­nies in Mace­do­nia, due to the finan­cial issues, are work­ing with decreased capac­i­ty, and it is pos­si­ble that there will be a fur­ther with­draw­al of cap­i­tal from Mace­do­nia. In the fol­low­ing peri­od, the Greek flight will be inten­si­fied. As said by the experts and the media, the mon­e­tary author­i­ties in the Repub­lic of Mace­do­nia have already done analy­sis for the impact of the Greek cri­sis in Mace­do­nia, and it is not­ed that those banks in Mace­do­nia that are under Greek super­vi­sion are safe and sta­ble. Taki Fiti says that the fact that Greek rat­ings fell to their low­est lev­els so far gives a bad impres­sion for the entire region, espe­cial­ly for the clos­est coun­tries.33Analy­sis by the dai­ly news­pa­per Utrin­s­ki Ves­nik, avail­able at: http://www.utrinski.com.mk/?ItemID=9EF45F0B1F055949806E35D5D5C35CE5 (last access: 3 May 2010). As Fiti stat­ed, the low Greek debt rat­ings will influ­ence the per­cep­tion of investors for the entire region, includ­ing Macedonia.

Prime Min­is­ter Gruevs­ki showed seri­ous con­cerns for the Greek cri­sis. Accord­ing to the Prime Min­is­ter, the sit­u­a­tion is on the verge of becom­ing dra­mat­ic and could have a big­ger influ­ence on the Mace­don­ian econ­o­my. “We cau­tious­ly fol­low the sit­u­a­tion in Greece, with hope that this issue will soon be closed and that the Euro­pean Union will find a solu­tion for stop­ping the pro­gres­sion of the issue in the EU and the region as well, because if it takes fur­ther neg­a­tive direc­tions, which is also pos­si­ble, it might rep­re­sent new shocks for our econ­o­my”, said the Prime Min­is­ter.44Inter­view of the Prime Min­is­ter Niko­la Gruevs­ki for TV Sitel’s news, avail­able at: http://www.sitel.com.mk/dnevnik/biznis/gruevski-grchkata-kriza-mozen-nov-shok-za-makedonskata-ekonomija (last access: 30 April 2010).

The polit­i­cal and expert opin­ion in Mace­do­nia was also focused on com­par­ing the sit­u­a­tions in Mace­do­nia and Greece – between a can­di­date coun­try and a mem­ber state. The Inter­na­tion­al Mon­e­tary Fund’s vis­it in Mace­do­nia and their views on the cri­sis were very live­ly dis­cussed. Name­ly, the for­eign posi­tion of Mace­do­nia has improved. Exports are start­ing to increase and imports are still decreas­ing. The deficit is slow­ly decreas­ing and it is expect­ed to fall to 2.5 per­cent of gross domes­tic prod­uct (GDP). The Min­is­ter of Finance Stavres­ki stat­ed that Mace­do­nia will accom­plish its planned growth of 2 per­cent of GDP in 2010, and a mod­er­ate but suc­cess­ful recov­ery of domes­tic expen­di­ture is expect­ed, which will be espe­cial­ly promi­nent in the sec­ond half of this year.55The Inter­na­tion­al Mon­e­tary Fund obser­va­tions, and the address of the Min­is­ter of Finance. Stavres­ki, Mace­don­ian Infor­ma­tion Agency, avail­able at: http://www.mia.mk/default.aspx?vId=73655519&lId=1&pmId (last access: 5 May 2010). Income was low­er than planned and also decreased from last year, but improve­ments were noticed for the first time in April 2010. Stavres­ki said that he expects this trend to con­tin­ue to the end of this year, and he announced care­ful pol­i­cy in the expen­di­ture side and its adap­ta­tion if need­ed. Gosev, Gov­er­nor of the Cen­tral Bank in Mace­do­nia, said that the recov­ery does not depend only on Mace­don­ian pol­i­cy, it is depen­dant on a world­wide recov­ery, and espe­cial­ly on the part with which Mace­do­nia col­lab­o­rates most. Accord­ing to the esti­mates of Mace­don­ian experts, Mace­do­nia will lose more than 220 mil­lion US Dol­lars by 2014 as a con­se­quence of the Greek cri­sis.66Analy­sis and reportage from the dai­ly news­pa­per Vreme, avail­able at: http://www.vreme.com.mk/DesktopDefault.aspx?tabindex=7&tabid=1&EditionID=2047&ArticleID=142867 (last access: 10 May 2010).

The Mace­don­ian media were occu­pied with the debate on whether the cri­sis in Greece is becom­ing a Euro­pean cri­sis. With the wors­en­ing of cred­it rat­ings for Greece, Por­tu­gal and Spain, the cri­sis is spread­ing. Talk now cen­tres on the over­all eco­nom­ic growth of the Euro­zone, the eco­nom­ic prospects of the EU as a whole and the means of deal­ing with the situation.

In that con­text, the per­cep­tions of investors on Greece, but also on the Balkan region and Europe as a whole, are wors­en­ing, which undoubt­ed­ly has impli­ca­tions for the coun­tries that are not direct­ly affect­ed by the cri­sis.77From the dai­ly news­pa­per Utrin­s­ki Ves­nik, avail­able at: http://www.utrinski.com.mk/default.asp?ItemID=053C9ED46F1C7F45921A3E6E989C6CF6 (last access: 10 May 2010).

The Mace­don­ian media report­ed on the deci­sion of the finance min­is­ters in the Euro group to sup­port Greece.88From the TV Sitel news, avail­able at: http://www.sitel.com.mk/dnevnik/biznis/evrogrupata-podgotvena-da-obezbedi-30-milijardi-evra-pomosh-za-grcija (last access 20 May 2010). Accord­ing to the media, the min­is­ters stat­ed that, although Athens has their sup­port, it still needs to take respon­si­bil­i­ty for its own state finances. Also, although the Euro group sup­ports Greece, it stills demands con­crete mea­sures for decreas­ing Greece’s pub­lic debt. It is already clear that Greece will man­age to “come out of the woods” with the 120 bil­lion Euros it will get from the EU and the IMF in the next 3 years, but in return Greece had to pledge unseen cuts and mea­sures, which will turn pub­lic opin­ion against the gov­ern­ment and wors­en the over­all sit­u­a­tion in the coun­try and the region, analyse the experts in the Mace­don­ian media.99From the dai­ly news­pa­per Nova Make­doni­ja, avail­able at: http://www.novamakedonija.com.mk/NewsDetal.asp?vest=120101058271&id=11&setIzdanie=21888 (last access: 20 May 2010).

The newest eco­nom­ic strat­e­gy for sus­tain­able growth, known as the Europe 2020 Strat­e­gy, appeared dur­ing the biggest eco­nom­ic cri­sis of the last decades. The strat­e­gy for inno­va­tion and green growth are part of the draft plan for com­pe­ti­tion and the pro­pos­als to strength­en the mon­i­tor­ing of nation­al reform pro­grammes.1010Accord­ing to the offi­cial infor­ma­tion from the Assem­bly of Repub­lic of Mace­do­nia avail­able at: http://www.sobranie.mk/default.asp?ItemID=5222EE77E5736F4BAAE5772654471CD6 (last access: 09.05.2010). Europe 2020 replaces the Lis­bon Agen­da from 2000, accord­ing to which the Union was sup­posed to become one of the most dynam­ic knowl­edge based economies by 2010. Accord­ing to the Mace­don­ian media, the suc­cess of Europe is pos­si­ble only if the Union acts togeth­er, through a strat­e­gy which will secure a more effi­cient exit of the eco­nom­ic cri­sis, as well as secur­ing a sus­tain­able and inclu­sive econ­o­my, which will bring a high employ­ment lev­el, pro­duc­tiv­i­ty and social cohe­sion. The media in Mace­do­nia refer to the Europe 2020 Strat­e­gy as a base for the vision of the Euro­pean social and mar­ket econ­o­my for the 21st cen­tu­ry. The strat­e­gy has three priorities:

  • strong growth through the devel­op­ment of a knowl­edge and inno­va­tion based economy;
  • sus­tain­able growth through resource pro­mo­tion and a green­er and more com­pet­i­tive econ­o­my; and
  • strong econ­o­my growth with a high employ­ment lev­el and deliv­ery of social and ter­ri­to­ry cohesion.

The devel­op­ment of these pri­or­i­ties will be mea­sured through the suc­cess and accom­plish­ments of cer­tain measures.

The expert opin­ion in the Mace­don­ian media is that the world­wide eco­nom­ic cri­sis brought many prob­lems and unsta­ble ten­den­cies in the econ­o­my to sur­face, but, with this Strat­e­gy, the EU econ­o­my can be direct­ed on the right track.1111From the Alsat TV, avail­able at: http://alsat.mk/svet/242414.html?print (last access: 21 May 2010).

    Footnotes

  • 1Analy­sis by the dai­ly news­pa­per Utrin­s­ki Ves­nik, avail­able at: http://www.utrinski.com.mk/?ItemID=9EF45F0B1F055949806E35D5D5C35CE5 (last access: 3 May 2010).
  • 2Analy­sis by the Mace­don­ian Edi­tion of Deutsche Welle, avail­able at: http://www.dw-world.de/dw/article/0„5522196,00.html (last access: 30 April 2010).
  • 3Analy­sis by the dai­ly news­pa­per Utrin­s­ki Ves­nik, avail­able at: http://www.utrinski.com.mk/?ItemID=9EF45F0B1F055949806E35D5D5C35CE5 (last access: 3 May 2010).
  • 4Inter­view of the Prime Min­is­ter Niko­la Gruevs­ki for TV Sitel’s news, avail­able at: http://www.sitel.com.mk/dnevnik/biznis/gruevski-grchkata-kriza-mozen-nov-shok-za-makedonskata-ekonomija (last access: 30 April 2010).
  • 5The Inter­na­tion­al Mon­e­tary Fund obser­va­tions, and the address of the Min­is­ter of Finance. Stavres­ki, Mace­don­ian Infor­ma­tion Agency, avail­able at: http://www.mia.mk/default.aspx?vId=73655519&lId=1&pmId (last access: 5 May 2010).
  • 6Analy­sis and reportage from the dai­ly news­pa­per Vreme, avail­able at: http://www.vreme.com.mk/DesktopDefault.aspx?tabindex=7&tabid=1&EditionID=2047&ArticleID=142867 (last access: 10 May 2010).
  • 7From the dai­ly news­pa­per Utrin­s­ki Ves­nik, avail­able at: http://www.utrinski.com.mk/default.asp?ItemID=053C9ED46F1C7F45921A3E6E989C6CF6 (last access: 10 May 2010).
  • 8From the TV Sitel news, avail­able at: http://www.sitel.com.mk/dnevnik/biznis/evrogrupata-podgotvena-da-obezbedi-30-milijardi-evra-pomosh-za-grcija (last access 20 May 2010).
  • 9From the dai­ly news­pa­per Nova Make­doni­ja, avail­able at: http://www.novamakedonija.com.mk/NewsDetal.asp?vest=120101058271&id=11&setIzdanie=21888 (last access: 20 May 2010).
  • 10Accord­ing to the offi­cial infor­ma­tion from the Assem­bly of Repub­lic of Mace­do­nia avail­able at: http://www.sobranie.mk/default.asp?ItemID=5222EE77E5736F4BAAE5772654471CD6 (last access: 09.05.2010).
  • 11From the Alsat TV, avail­able at: http://alsat.mk/svet/242414.html?print (last access: 21 May 2010).

The reports focus on a report­ing peri­od from Decem­ber 2009 until May 2010. This sur­vey was con­duct­ed on the basis of a ques­tion­naire that has been elab­o­rat­ed in March and April 2010. Most of the 31 reports were deliv­ered in May 2010.

The EU-27 Watch No. 9 receives sig­nif­i­cant fund­ing from the Otto Wolff-Foun­da­tion, Cologne, in the frame­work of the ‘Dia­log Europa der Otto Wolff-Stiftung’, and finan­cial sup­port from the Euro­pean Com­mis­sion. The Euro­pean Com­mis­sion is not respon­si­ble for any use that may be made of the infor­ma­tion con­tained therein.