Decisive action needed to stem economic crisis
Then again, perhaps the commission leaking details of these doomsday measures will galvanise European leaders to act more decisively on the economic crisis.
For example, maybe it helped convince German Chancellor Angela Merkel to miss out on her visit to Rio de Janeiro for the climate conference — she says she will instead return to Germany after this weekend’s Group of 20 summit in Mexico, in order to prepare for an EU summit on the financial crisis at the end of the month.
It would be strange to imagine her not doing so — with World Bank president Robert Zoellick saying eurozone leaders may be nearing a “break the glass” emergency fire alarm moment, and both IMF chief Christine Lagarde and billionaire investor George Soros saying the EU has three months to avoid a euro breakup.
That’s a sobering thought not just for EU leaders but also for our cattle farmers who obsess about the likely cattle supply and demand situation in the autumn, and may overlook the danger that the “backend” of the year could also see the EU financial system temporarily imploding.
Perhaps farmers should be studying Alexis Tsipras instead of cattle market trends.
If his Syriza party wins or come a strong second in the Greek elections next week, he has said he will reject the €130bn Greek bailout agreed with the EU and IMF, neither of which are prepared to re-negotiate with him.
Greece leaving or being forced out of the eurozone is the likely consequence — and European finance officials say that might force them to limiting withdrawals from cash machines, impose border checks and introduce eurozone capital controls — all designed to limit a euro bank run or capital flight.
Members of the Eurogroup Working Group, which consists of eurozone deputy finance ministers and heads of treasury departments, have discussed these options in some detail.
No doubt, this crisis would deepen the EU recession, bringing even higher unemployment, as consumer confidence takes another blow.
The cattle farmers worrying about autumn prospects would be affected, as consumers shop for cheaper cuts, and the sale of meals prepared outside the home could slump.
Dairy and crop farmers could feel parallel recession effects.
But everyone still has to eat, and it wouldn’t be all bad news, with Irish food exports possibly benefiting from a euro slump on exchange markets.
And recession pressure on commodity prices could keep our feed and fertiliser imports affordable.
On the other hand, the eurozone may limp on in its present form — the preferred option for many, offering the prospect of food commodity prices continuing at their current satisfactory levels.
Either way, EU leaders must grasp the nettle. Farmers need decisive EU leadership — because their direct payments in 2014 are jeopardised by EU leaders being too bogged down in the euro crisis to prepare the EU budget figures for the next eight years — which must be in place before serious negotiations can start on the Common Agriculture Policy up to 2020.
Farmers are in the dark about their CAP prospects in 2014, because European leaders have allowed eurozone sovereign debt replace mortgages as the No 1 global risky investment.
No wonder Barack Obama has called on European leaders to act quickly to stem their economic crisis.
Farmers agree with him.
