to him, Eurozone is never going to come back to the state of entirety it once used to be...

He even asks questions about what will occur less costly – rescuing Eurozone or
calling it a day.
However, it seems reasonable to maintain more reserved attitude towards
potential disintegration of Eurozone than Joseph Stiglitz had. Actually, it has been
more than once that the European Union managed to overcome crises and oft en
even to come out stronger. It may well be the same way this time. Nevertheless,
a number of question marks still emerge, no doubt about that. We know only too well
that creditors of indebted companies and countries are mainly banks and fi nancial
institutions based in France, Germany, Netherlands and other countries (see Table
1). Considering that collapse of many entities from the group of PIGS countries
would imply bankruptcy of a large number of fi nancial institutions and, indeed,
a substantial part of economy in Germany, France, Netherlands, Austria and Benelux
countries. Th
erefore, a common interest emerges, a kind of a deal according to
which it is better to come up with some rescue or emergency solutions. Put simply,
some money has to be found to help bail the PIGS countries out. Th
e task is diffi
cult
and in most core countries also controversial. Statistics suggest that such an aid-
intervention should contribute the amount of at least one trillion euro. Th
ese are,
quite understandably, enormous sums, extremely diffi
cult to bear for the budget of
the entire European Union. Th
e burden of the operation has mainly been borne by
France, Germany, and Benelux countries, while those standing in line to benefi t from
fi nancial support also include Spain and then, more probably than not, Italy. Th
e key
doubt that arises is about where the taxpayers’ tolerance in net payer countries will
fi nd its limits. It is perfectly justifi ed, then, for Germans or the French to ask why
those who don’t work tenaciously, steadily and effi
ciently enough should enjoy better
lives than they do.
Data presented in Table 1 or, more specifi cally, the amounts of money involved,
indicate that it is appropriate for societies of countries that have to cope with bailing
out the indebtedness of peripheral countries to demand the balance of that debt to
be prepared together with explanation of the reasons why it emerged. While this
expectation is very understandable, such complete and comprehensive explanation
7
End of Eurozone?
is also really signifi cant as it may considerably infl uence the way solidarity within
the EU will evolve in the future.
Table 1. Exposition of fi nancial assets of PIGS countries in balance
sheets of banks from selected countries (US$ billions)
Entities
US$ billions
German banks
512.7
French banks
410.2
Spanish banks
117.3
Italian banks
73.3
Total Eurozone
1397.6
Source: BIS [2010].
Th
e expectations or demands in question seem the more justifi ed that also
governments of core countries are to blame, partially at least. Aft er all, once Eurozone
was established and demand for credits and for capital grew up enormously on
the part of PIGS countries, the core countries failed to pay enough attention to
supervision or coordination of economic policies of the PIGS countries. In fact, the
former ones seemed to forget that the latter ones were countries of high economic and
fi nancial risk. Worse still, Berlin, Paris or Brussels turned a blind eye on authorities of
Greece, Ireland or Portugal ‘tuning up’ their respective balances and offi
cial statistics,
even at the stage of their accession to Eurozone, where it is in principle rather easy to
get capital and to enjoy low interest rates. At the same time, one has to remind again
and again that the project to set up Eurozone was mainly a political one. Otherwise,
Greece, and not only Greece, would have to wait in line quite long for having the
common European currency.
Today it has also become clear that Eurozone, rather than only consist of a club
of gentlemen, also includes that of small- or big-time chiselers. And no wonder, aft er
all, considering that in diversifi ed Europe diff erent traditions have grown. Of course,