European crisis of 2012

Economical crisises used to emerge and repeat themselves throughout the history. Even though they seem unavoidable as a circular process, and many people say that such crisises are a natural process of the economy, we should study and analyze the economy in order to forecast and prevent any upcoming crisis. It's an essential question any economist should think of. Therefore, I am going to talk about the current crisis in the Eurozone.

Countries in the periphery of the Eurozone face one of the toughest dilemmas in recent history. Each of them with their particularities, Greece, Portugal, Italy and Spain all share the challenge of dealing with the consequences of sustained large current account deficits, the accumulation of public and private debt and a protracted banking crisis. On top of these troubles, they lack an independent monetary policy, possess minimal fiscal maneuverability due to already unsustainable levels of public debt, and have to work under a marked sense of urgency due to painful and untenable unemployment rates.

Their dilemma is over whether to implement further structural reform in the frame of the Eurozone, knowing that these measures could take longer to take effect than what is politically acceptable, or exit the Euro in order to regain competitiveness through a sharp currency devaluation and face huge upfront costs and an uncertain future.

Meanwhile, current account surplus countries at the core of the Eurozone like Germany face a different dilemma: Either keep the economic benefits of the Economic and Monetary Union (EMU) at a cost of committing enormous economic transfers to countries in the periphery, or allowing those countries to go bust and, possibly, seeing the end of the common currency.

However, allowing the weakening of the Euro, let alone its collapse, would surely be an extremely costly move for countries at the core of the single currency. Germany alone has committed over €200 billion in both direct funding and credit guarantees to the European Financial Stability Facility (EFSF) and to the European Stability Mechanism (ESM).

Countries in the core and periphery of the Eurozone face very difficult decisions. Overall, however, the options are clear: Further commitment to the single currency with reforms in the periphery and strong wealth transfers from the core, or keeping the single currency at risk and, quite possibly, allowing for its demise. It is our assessment that the consequences of a Euro collapse are so dramatic and their ramifications so uncertain that all efforts should be made to shore up the EMU.

Currency areas are rarely born out of natural economic circumstances. They are launched and shaped, primarily, by sustained political will. The Euro was no exception. If the Eurozone is to survive the present crisis, strong and concerted action is needed. Inaction is not an option.

I’d like to propose the measures that would be helpful under such circumstances:

1. The creation of a European Troubled Assets Relief Program (ETARP) to restore the balance sheets of financial institutions across the Eurozone, especially those in the periphery. ETARP would inject capital into European banks restoring confidence in their sustainability and kick-starting a more robust lending cycle.
2. 2. The creation of Eurobonds and a European treasury. There is an urgent need for the launch of a safe asset that can guarantee the basic funding needs of all Eurozone members. Such an asset should take the form of a European bond with some form of joint guarantee from all Eurozone members.
3. 3. The creation of a European Unemployment Fund (EUF) and strengthening the European Labour Policy. The EUF would be composed of contributions by the different Eurozone countries according to their GDP, population and previous year unemployment levels. Unemployment subsidies in every country of the EMU would come from the EUF. In parallel to this measure, we would also need to see an important transfer of sovereignty to EU (or Eurozone) bodies so that they could work on the optimisation of the labour market across the EMU.

The current situation in the Eurozone is extremely complicated; but extreme situations have advantages too. The current state of affairs will allow, and encourage, governments in the periphery to make reforms and take measures that would have been politically unacceptable otherwise.

What seems clear, however, is that Europe has the capacity to fix the Eurozone and that it would be a catastrophic mistake, and a manifestation of a total lack of vision from European leaders, to let the single currency fail without first employing all the tools available to save it. The tools available today are none other than deep reforms in the periphery, wealth transfers from the core to reinforce those reforms, and an overall more effective plan for European economic governance. The European dilemma will force everyone to make tough decisions, but the best path to follow is to work together and to deepen European integration.

Reasons for business failure in Russia.

Presentation plan

1. Current situation in a nutshell
2. Hazards and benefits of doing business in Russia.
3. Ways to improve chances of business success.

Russia, the largest country in the world, with its vast amounts of natural resources and rather young economy could be a paradise for entrepreneurs. Could be, but unfortunately this unique country has its unique business environment, which sometimes becomes a hard obstacle on the way of international and even domestic businesses. Let’s have a deeper look

The main obstacle of doing business in Russia, is the unique way of doing it here. Personally, I used to talk to people of a variety of different nations and cultures and they all were in some way surprised of what I told them about business environment here. There are 2 main groups of their points: state problems such as huge taxes, imprecise law system etc. and the people’s attitude problems

Underestimating the importance of innovations may lead to failure in business in a long term perspective

This article (ыть может личше This presentation/My Presentation?) highlights the current economical situation in the Euro-zone. Initially we shall have a look at the countries facing the most troublesome situation - Greece, Portuguese, Spain and Italy. The second thing we will have a look at is the core countries. What should they do? Continue helping the PIGS group, or start preparation for Euro-zone breakdown, and the consequences of either of these decisions?. Another important point is the measures being taken by the countries in the Euro-zone. Measures, mend to avoid further decline and prevent the very possibility of development of disastrous scenarios that could appear.  Last but not least, measures, which could improve the situation, if taken as soon as possible.