Everyone is just kind of holding their breath to view the fall of the giants in Europe. Starting from the crumbling of Greek Pantheon, European countries are dragged along into the crisis as if the Greek Gods had left and shattered The Olympus, lol. Italy, once the birth place of the Great Roman Empire, has suffered the lingering crisis as well. Such dire situation has forced Italia Prime Minister, Silvio Berlusconi to resign after austerity budget had been passed. It is as if we witness history repeats itself, the clock of times being rewind back at the era when Greece and Roman Empire reached glorious momentum, then crumbled . Both leaders and citizens alike in European nations must brace themselves for an extreme long economic winter.
The lingering European debt crisis is worsening European Nations (EU) grapple with a massive sovereign debt crisis which bring worst economic winter. Last week, Standard & Poor’s (S & P) had mass downgraded nine euro zone countries like shaky borrowers such as Italy and Spain credit ratings which instantly sparked renewed fears over global market. S & P further stripped off France of its once-sterling AAA debt rating into AA. The lost over France had forced the credit ratings agency to cut European Financial Stability Facility (EFSF) to AA+ from AAA on Monday, plunging the European market into a fresh crisis. The agency argued that its actions on euro zone ratings were “primarily driven by insufficient policy measures by EU leaders to fully address systemic stresses”. Meanwhile, the United States is still struggling to recover from its financial crisis since 2008. The rate of unemployment remains stubbornly high and cut spending is on the rise to battle the enormous deficit. The global market now fears that the gloom over Europe would soon turn into doom. Combined with the sluggish economic development in US, this recently situation has roiled the global market by fears of new setbacks, defaults and the possibility of a double-dip recession. It may seem that the giants start to fall one after another.
Anxiety is building over the fate of Euro currency backed by the European Union (EU). It is the symbol of unity of the EU countries. Now, the solidity of EU is put on a test. In order to work properly, the struggling EU countries have to overcome their differences on proposals and formulas to cure the crisis. They have to work hard to correct differences in the underlying economies (i.e labour migration, nominal wage adjustments, price adjustments). In addition, they should establish mechanisms to ensure that imbalances are promptly corrected. It takes extra efforts to draw such consensus while each is trying to save its own skin. It is a financial as well as political issue. The road to recovery will be bumpy and rough. The global financial players are in wait and see position.
While US and Europe are still struggling to overcome the financial crisis, political turmoil is brewing in the Middle East Countries that once overpower Europe during the glory of the Ummayad and Abassid caliphate. The unrest is triggered by the rampant injustices, poverty and deteriorating economic life, and the repression for freedom of speech by dictatorship over the countries for generations. Tunisia is the country which brought the dictatorship, President Ben Ali, down and this victory has been causing a domino effect far reaching across the Middle East in which the legacy of U.S.-dominated governments across the region resided. The U.S. empire’s reach in the resource-rich and strategically vital Middle East has been shaken to its core as one by one the Giants fall. Will these countries be able to regain its sovereignty and seize an increasing role in the world? Well… the road into such stability and glory is still far ahead with all its long winding bumpy steps.
Meanwhile, Indonesia has scored a perfect point after Fitch had upgraded its sovereign credit rating to put Indonesia back on line among countries having the investment grade level last December, and followed by Moody this January after almost fourteen years of degradation since 1997/1998 economic crisis. Amidst global economic and financial uncertainty, this achievement is something we all cherish. It is recognition of the success of Indonesia to maintain its macroeconomic stability. The inflation rate is successfully curbed and the economic growth remains high. With these positive economic outlook, Indonesia might become a glistening jewel in Asia for investors who seek stable economic environment.
Yet, challenges ahead remain hefty especially how the government keeps maintaining close coordination with Bank Indonesia and other elements to safeguard the macroeconomic stability and how Bank Indonesia maintains to keep executing its right decision within the right time. Further, the government has to tackle the lack of infrastructure and rampant corruption. The government cannot afford to relax and remain alert at all times. It has taken much effort and many years to climb into this investment grade level but it will take only a few mistakes or bad decisions to undo the progress.
The lingering European debt crisis is worsening European Nations (EU) grapple with a massive sovereign debt crisis which bring worst economic winter. Last week, Standard & Poor’s (S & P) had mass downgraded nine euro zone countries like shaky borrowers such as Italy and Spain credit ratings which instantly sparked renewed fears over global market. S & P further stripped off France of its once-sterling AAA debt rating into AA. The lost over France had forced the credit ratings agency to cut European Financial Stability Facility (EFSF) to AA+ from AAA on Monday, plunging the European market into a fresh crisis. The agency argued that its actions on euro zone ratings were “primarily driven by insufficient policy measures by EU leaders to fully address systemic stresses”. Meanwhile, the United States is still struggling to recover from its financial crisis since 2008. The rate of unemployment remains stubbornly high and cut spending is on the rise to battle the enormous deficit. The global market now fears that the gloom over Europe would soon turn into doom. Combined with the sluggish economic development in US, this recently situation has roiled the global market by fears of new setbacks, defaults and the possibility of a double-dip recession. It may seem that the giants start to fall one after another.
Anxiety is building over the fate of Euro currency backed by the European Union (EU). It is the symbol of unity of the EU countries. Now, the solidity of EU is put on a test. In order to work properly, the struggling EU countries have to overcome their differences on proposals and formulas to cure the crisis. They have to work hard to correct differences in the underlying economies (i.e labour migration, nominal wage adjustments, price adjustments). In addition, they should establish mechanisms to ensure that imbalances are promptly corrected. It takes extra efforts to draw such consensus while each is trying to save its own skin. It is a financial as well as political issue. The road to recovery will be bumpy and rough. The global financial players are in wait and see position.
While US and Europe are still struggling to overcome the financial crisis, political turmoil is brewing in the Middle East Countries that once overpower Europe during the glory of the Ummayad and Abassid caliphate. The unrest is triggered by the rampant injustices, poverty and deteriorating economic life, and the repression for freedom of speech by dictatorship over the countries for generations. Tunisia is the country which brought the dictatorship, President Ben Ali, down and this victory has been causing a domino effect far reaching across the Middle East in which the legacy of U.S.-dominated governments across the region resided. The U.S. empire’s reach in the resource-rich and strategically vital Middle East has been shaken to its core as one by one the Giants fall. Will these countries be able to regain its sovereignty and seize an increasing role in the world? Well… the road into such stability and glory is still far ahead with all its long winding bumpy steps.
Meanwhile, Indonesia has scored a perfect point after Fitch had upgraded its sovereign credit rating to put Indonesia back on line among countries having the investment grade level last December, and followed by Moody this January after almost fourteen years of degradation since 1997/1998 economic crisis. Amidst global economic and financial uncertainty, this achievement is something we all cherish. It is recognition of the success of Indonesia to maintain its macroeconomic stability. The inflation rate is successfully curbed and the economic growth remains high. With these positive economic outlook, Indonesia might become a glistening jewel in Asia for investors who seek stable economic environment.
Yet, challenges ahead remain hefty especially how the government keeps maintaining close coordination with Bank Indonesia and other elements to safeguard the macroeconomic stability and how Bank Indonesia maintains to keep executing its right decision within the right time. Further, the government has to tackle the lack of infrastructure and rampant corruption. The government cannot afford to relax and remain alert at all times. It has taken much effort and many years to climb into this investment grade level but it will take only a few mistakes or bad decisions to undo the progress.
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