Old EU members take measures to stimulate weak neighbors not to make them happy, but to “make something nice” for themselves, expert Alexei Zubets explained.
In Europe, in 2020, against the backdrop of the coronavirus pandemic, a deep recession is inevitable, the European Commissioner for Economics Paolo Gentiloni admitted on the eve. According to him, the decline in Eurozone GDP in 2020 will be “worse than during the global financial crisis” and may reach 7.5%, as previously predicted by the International Monetary Fund. EU states have not yet reached agreement on funding arrangements and criteria for emergency assistance to deal with the effects of the pandemic. It is estimated that the total size of the crisis package will be 540 billion euros.
The European Union is going to give out quite serious money to the affected states, but these measures will only accelerate the formation of a two-speed Europe, said Alexei Zubets, Doctor of Economics, Vice-Rector of the Financial University under the Government of the Russian Federation.
“From the point of view of Brussels, the way out of the crisis that has erupted due to coronavirus is economic stimulation. The European Union leadership believes that in order to save the economy, some money needs to be distributed, they will go into the economy and create demand, and this, in turn, will help restart production, “said Zubets Sputnik Latvia.
He explained that the old EU members are taking these measures to stimulate weak neighbors “not in order to make them happy, but to make themselves happy.”
“The restoration of demand on the periphery will work to increase the economic activity of the EU core. This is not the salvation of Eastern Europe and other periphery, but its own production by creating additional demand,” said Zubets.
The expert recalled that the EU has long embarked on the path of Europe at several speeds.
“This ideology is not yesterday’s invention. There is a certain core whose economic interests dominate the periphery. In the current crisis, the EU will move more and more towards this device model. In the long run, there is no reason to say that the core will support the periphery and take care of so that the inhabitants of the Baltic states, Poland and Eastern Europe as a whole would live as Germans, “Zubets warned.
According to the expert, the most likely source of funding for the crisis package is not the EU budget.
“These will be stimulating measures of the European Central Bank. We can talk about measures to support stock markets, as well as ECB soft loans for businesses and consumers in the eurozone. In the short term, given the large losses caused by the EU coronavirus economy, financial discipline will be slightly weakened. But there is no doubt that the nuts will be tightened the very next day after the problems caused by the coronavirus end, “concluded Zubets.