In danger of collapse a few months ago, the euro seems to be saved, especially after the agreement on Greek debt that brought optimism in Europe, but 2013 will remain a very difficult year, with a devastating outcome of the social and economic crisis, according to AFP.
A year ago, analysts were predicting the “Grexit”: Greece exit from the euro area was considered a certainty, not a hypothesis, and this risk has been a big part of 2012.
At present, the prospect of a member to leave the eurozone disappeared, believes Janis Emmanouilidis, an analyst at the European Policy Centre (EPCI).
“Many observers predicted that Greece has lost the game. We now know that they were wrong,”
said Commissioner for Economic Affairs, Olli Rehn.
For this to happen numerous meetings were held, often tense, of eurozone finance ministers, and on December 13 Greece received the last tranche of €34.3 billion of the aid without which it would have gone bankrupt.
A spectacular and emblematic result of this agreement was that Standard & Poor’s improved Greece’s rating by six notches, to B-with a stable outlook and the euro has appreciated against the dollar.
Another good news at year-end was the compromise of European finance ministers for the joint surveillance of euro area banks, after several weeks of deadlock. The decision is considered a first step towards banks’ union, which would prevent the crises arising on financial institutions to spread to the rest of the economy.
The real turning point of 2012 took place in the summer but when President of the European Central Bank (ECB), Mario Draghi, has promised to take all necessary measures to save the euro.
In early September, Draghi presented his action plan in the form of an unlimited purchase program of bonds from states in financial difficulty, an announcement that immediately lowered the Spanish and Italian bond yields.
Uncertainties for 2013 are primarily political, with general elections in Italy and then in Germany, while political power in Greece is on the edge, said Emmanouilidis.
There are also the economic and social risks, with opinions, including the IMF, that drastic cuts in public spending, with dramatic consequences on the labor market, wages and pensions, have worsened the crisis.
The eurozone is back in recession in the third quarter and the recoil of GDP increased in the last three months. Recovery is expected next year.
Unemployment in the eurozone in October reached a record 11.7% of the working population, with peaks of 25% in Greece and Spain.
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