Earlier this week, German consultancy group Roland Berger unveiled its strategy for combating the troublesome Eurozone crisis.
Presented as a ‘viable and credible’ alternative, Eureca inspires itself from the Trust Agency (Treuhandanstalt) that set about restructuring the obsolete East German economy in the immediate aftermath of German unification in 1990 – and consequently leading to the privatisation of 8,500 industrial and business assets in Eastern Germany alone. Yet akin to the Treuhand’s controversial legacy, Le Monde correspondant Charlotte Chabas questions the controversial impact of such an ‘aaudacious’ plan, notably on the issue of safeguarding Greece’s sovereignty.
‘Eureca’ would initially consist of transferring Greece’s public assets (estimated to total €125 billion) – from state property, telecommunications, banks, to ports, airports and highways – within a European holding firm financed by EU member states, who would then proceed in retaining or the outright selling off of such resources.
From here, the generated funding from such sales would, in principle, enable the Greek state to reimburse its lenders and theoretically reduce its current debt/GDP ratio of 145%, to 60% by 2025. Roland Berger highlight that this would not only drastically cut interest rates on loans, but also re-inject money into the Greek state through investment and the creation of an estimated 250,000 jobs.
Should things go to plan, this would result in Greece coming within European stability pact guidelines (concerning public debt) by 2025, and reducing aggressively market speculations on Greek, Italian, Irish or Spanish defaults – thus not only permitting the reintroduction of economic growth in Greece, but also safeguarding the stability of the Eurozone.
Whilst members of the ‘Troika’ (IMF, European Central Bank and European Commission) have formally ruled out all talks of mass ‘transfers’ of Greece’s public structures, La Tribune financial expert François Roche argues that it is ‘very likely’ that such ‘plans’ were concocted within Angela Merkel’s entourage and with the European Commission’s expert approval.
roughsociety’s final word
In the face of nervous European markets and a stagnating Eurozone – whilst not forgetting Germany’s cynicism over its role in the current bail outs – it seems that Europe is left with a decision; whether to expel Greece from the Eurozone and see it implode, or continue with its costly and unaffordable bailouts. Furthermore, it would be all too easy to forget that much uncertainty looms over the cases of Italy and Spain. Whilst ‘Eureca’ may well become an unprecedented reality, it is one that the Troika will feel as being a case of selling the furniture in order to save the house.