Gloomy Mood in the EU By Dr. Bobby Srinivasan and Dr. Sudhakar Balachandran

The next parliamentary election of EU is scheduled for May 22, 2014. The sense of frustration and insecurity in the various countries will dominate the election. For example, 39 percent of respondents in France, in a survey conducted by Financial Times of London said that the economy was much worse than it was an year ago. Similarly 58 percent of the Italians felt that their jobs are not secure at all. This is in sharp contrast to the British citizens who felt that the economy was in a much better shape than a year ago. The UK recently has its 2014 growth forecast upgraded by the OECD club to be around 3.2 percent.

Part of the problem is the global economic slow-down since the euro crisis of 2011. Recently, Spain issued government bonds with yields not much higher than the German government bonds and the subscription for the bonds gave an indication that the confidence has returned to the Spanish economy. Current election is about whether each member country wants to stay within the EU or desire to exit. For example in France where the right wing National Front is leading, neck and neck with the center right party, 22 percent of the voters said they would support a party that sought an exit from the EU.

One can clearly see that the cooperation among the European countries is slowly waning to coexist as a union and so it is quite probable that many of them would love to walk away from the union. Francois Hollande of France said last week that he would not run for reelection if the persistently high unemployment rate was not falling by the time of the next presidential election in 2017. Also 36 percent of Britans said that they were most inclined to vote for a party that can support for the country’s withdrawal from the EU. The central theme in this discussion is that most of the European countries are facing very high levels of unemployment and feel that they could bring it down if they walk out of the European Union. It will be sad when some countries walk out of the current union. This will threaten the strength of their currency Euro. Let us wait and see the outcome of the election.

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