Schnöell says EU will overcome debt crisis
Published: Thursday, February 2, 2012
Updated: Thursday, February 2, 2012 16:02
The European debt crisis may be happening overseas, but according to Thomas Schnöell, Consul General of Austria in Chicago, Americans need to understand the importance the issue has globally.
"There are consequences for transatlantic relations. When you follow the financial markets in the U.S., you can see how sensitive they are to the development of the European Union," Schnöell said in the Gallagher-Bluedor Performing Arts Center lobby on Jan. 30. "Today, for example, I followed that in the morning when Greece had still not found an agreement on the haircut about their bets, the Dow Jones (Industrial Average) fell immediately, and afterwards (when) there was this good news about the establishment of the European Stability Mechanism, they (the DJIA) went up again."
Schnöell discussed the integration process of the EU, the debt crisis they're experiencing and the current consequences yet future benefits that may result from the financial fiasco in his lecture "The Future of the Eurozone: The European Project at a Crossroad."
"I don't think that the current crisis will lead to a break up of the Eurozone, but, in general, I think it will even reinforce the EU," Schnöell said. "When you go through the whole integration process, when the EU faced crisis, we always emerged stronger than before the crisis. Even if the current crisis is a real turmoil, I still think we can overcome (it)."
On the same day of Schnöell's lecture, European leaders agreed on a fiscal treaty, which will tighten economic regulations and policies with the hope that it will turn the debt crisis the other way around.
"This is a sign that core members of the Eurozone are aware that austerity packages and structural reforms are not enough, but that we also need economic growth and stimulus packages to overcome the crisis," Schnöell said. "This is all I know from today's meeting, but the first general reaction was overall positive."
Schnöell believes there are a number of regulations that will help raise stability in the EU economic market and help put the EU back on track.
"If members of the Eurozone continue to breach rules, or the so-called ‘mastery criteria,' there will be an automatic sanction mechanism. These sanctions can only be avoided if two-thirds of the members of the Eurozone vote against such sanctions," Schnöell said.
In addition to that regulation, Schnöell also said if the European Commission believes "a country really fails to implement the necessary measures — the mastery criteria — then they can say this country has to pay 0.1 percent of (the) gross domestic product to the bailout fund, for example."
In the end, however, Schnöell believes irresponsible states need to own up to their actions and change their ways.
"Why should we have to pay for countries that have not done their homework?" Schnöell asked. "Why should we pay when others retire at the age of 55, and in Germany, the retirement age was just increased from 65 to 75? These are important issues."
Tucker Olson, a freshman political science major, found the presentation interesting.
"I thought it was really informative about the Eurozone, and it was interesting to get an outsider's perspective as opposed to the U.S.'s," Olson said.
Derek Hofland, a freshman computer science major, said he thought the lecture was important for today's society.
"We definitely live in a global world, so anything that happens in the Eurozone will affect us directly," Hofland said. "I think it's important for us to know what's going on in the rest of the world, so we know how to respond to it here in America."