Transitional Economics and the European Economic Crisis: A Week Abroad

We all just got back from a delicious German dinner at Struwwelpeter, a restaurant older than Haverford College! It first opened in 1831, and has been serving knuckles, frankfurters and Bavarian sausages ever since. Anyways. the last 2 days have been so hectic that now is my first chance to really reflect on everything. Tuesday we went to the European Commission (EC) again for two more lectures about the current economic crisis. Our first lecture was by Mr. Stefan Appel, and it was on how the European Union is responding to the Sovereign Debt Crisis. He discussed two areas of response: short term crisis management and long term systemic strength and surveillance. In the short run, the EU is hoping to use the European Financial Stability Fund (EFSF) to loan financial support to countries in crisis. The EFSF is simply a pool of funds from Euro Area member states and will be replaced by a longer term program called the European Stability Mechanism in 2013 . The EC wants all member states to approve the EFSF unanimously; so far the EFSF has been approved by 16 of the 17 members states. The 17th member state, Slovakia, vetoed the agreement yesterday due to arbitrary internal political conflicts; analysts predict that it will ratify the motion on a second vote. In terms of long term surveillance and strengthening, Appel referenced the lectures we had previously had on the Stability and Growth Pact and the Excessive Imbalance Procedure, stating that fines and sanctions will be imposed in the future. Our next speaker, Ms. Ioana Diaconescu, further highlighted the issue of the sovereign debt crisis by presenting us with a case study of Portugal, Ireland, and Greece. She said that the recovery will take time as countries adjust to the appropriate fiscal policies and and consolidate their public finances.

After our meetings at the EC, we headed back to the hostel. I was planning on taking a well deserved nap, but one of my classmates, Mary Clare O’Donnell, suggested that we go for a bike ride around Brussels. We spent 4 hours exploring “Little Africa,” the European Parliament and Leopold’s Park for just 6 euros! I got back to the hotel and promptly went out again to a famous sports club called Celtica to watch the Belgium v. Germany soccer match. However, I feel like I was robbed of my experience to watch European football in Europe because Belgium lost 3-1 and the crowd was kind of depressed (next time, I’ll go to Spain to watch soccer). This morning, after a mad dash to the train station, we took a three hour ride from Belgium to Germany. It’s amazing how interconnected European nations are; we didn’t have to get our passports checked crossing the border. Europe is a far more unified continent now then its history would lead one to believe. The European Commission emphasized the importance of unanimous decisions and consensus in EC decision making because there are 27 different nationalities all working together to build a better future (reminds me of Haverford).

Anyways, tomorrow we are off to learn about Micro-Finance at the Frankfurt School of Finance and Management. It’s a little bit of a shift from our course but it should be very interesting. I’m off to bed. Gute nacht!!

This entry was posted on Wednesday, October 12th, 2011 at 4:23 pm by Jacob Lowy '14 and is filed under The Latest. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.