Much has already been published by the mass media about the economic woes embroiling the debt-ridden countries in the European Union (EU). It is common knowledge that their governments are facing a crisis pertaining to the management of massive national debts coupled with entrenched economic slumps. If events do not turn around soon, these countries will head for severe doldrums; and if that happens, Europe at large will be negatively impacted. Economists also say that the tumultuous waves will invariably spill over to the rest of the world, particularly those having significant trade transactions with European counterparts. 

The concerns explain why European Union and related institutions, including the International Monetary Fund (IMF), are still cracking their minds to work out in consonance for viable solutions to assist the debt-ridden European brothers so as to contain an imminent contagion. But to date, no concrete strategies have affirmatively been concluded.

What are the underlying factors that have dragged them to the current situation today? Despite a series of financial aids, Greece, for example, appears lost as to how it could extricate itself from the seemingly “every which way you may still lose” web. 

As I perceive in layman’s perspectives, essentially the options open to these governments involve the dilemma of striking the right balance between the following:-

As at the time of my writing, the three biggest labour unions in Italy have begun a week-long strike against the 33 billion euro austerity package proposed by new Prime Minister Mario Monti. According to news, he may relent by making some amendments.

Again, as I see it in layman’s perspectives, whichever balancing act any head of state in the problem-besieged group would deploy, he will still be not that popular. So, the crux of handling the debt and economic issues is not what is popular or unpopular, but more vitally what can work better. What can save the nation so that its people at large will be saved from perils resulted from the crisis?

Referring to Greece as the example again, then Prime Minister George Papandreou (before he recently quit) suggested increasing the retirement age. Although the reasons for suggesting this were not clearly spelled out, yet I believe he had plausible basis for the move. The working Greek populace, in response, protested in the streets. I also believe they had their reasons for doing so.

By increasing the retirement age for the Greek work force, the government would have reduced the overall retirement benefits or other social welfare schemes, at least to ease the burden of such expenditure on the government over the crucial period. In addition, more payroll tax would be collected. More people with spending power would provide some impetus to domestic consumption, which in turn should contribute to higher economic or production activities. As a layman, I can perceive this kind of possible positive chain effect.

I do not really understand why Greek workers protested over the proposal for a higher official retirement age. Perhaps, those who look forward to retirement were not happy with the apparent curb on early pensions?  Perhaps, the younger work populace felt that lesser promotion opportunities would avail to them if more elderly employees in senior positions were retained?

I am attracted to the heading used by The Edge Malaysia business weekly magazine (Dec. 12 -18, 2011 issue) for an article highlighting the Eurozone. It expresses: POLITICAL WILL IS KEY TO DEFUSE CRISIS. Yes, the governments of debt-ridden economies must have the political will to be affirmative enough to try their best to alleviate the current national woes; the governments of the stronger European economies must have the political will to work in consonance for formulating a more efficacious strategy so that an imminent contagion can be prevented from spreading over the rest of Europe and other parts of the world. Institutions like IMF and European Central Bank (ECB) must have the political will to lend a helping hand too. The issues require the concerted political resilience of all pertinent parties aimed at a common purpose. And hopefully, China will have common political sense to see that if it still chooses to stay away as an observer instead of helping out, its export-oriented economy (more than half of its exports go to Europe now) will not escape from being impacted too.