A new survey reveals that more than 40 percent of the Europeans are pessimistic about the future outlook of the European Union (EU).

In a poll conducted by the German Friedrich Ebert Foundation, 42 percent of the respondents said the EU is in decline while 29 percent expected the future to hold better prospects for the Union.

Some 23 percent stated that the condition of the EU will not change either for the better or worse with six percent saying they had no opinion.

The survey, published on September 5, 2012, was conducted from August 13 to 17 by telephone among 6,000 German, French, British, Italian, Spanish, and Polish adults.  Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland and Spain.

The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries including Portugal, Spain, Greece and Italy.

Greek Prime Minister Antonis Samaras has said that exiting the eurozone is not an option and would be a “nightmare” for his country.  Samaras made the remarks at a meeting of leading European Christian Democrat and centrist politicians in Rome on Friday.

“An exit from the eurozone is not a choice for Greece, it’s a nightmare. For us it’s not an option, it’s a total disaster,” Samaras said.

“And it’s not going to be easy for the rest of our partners, because once a country is out of the eurozone, speculators will start hitting the next weakest link, then the next one,” he added.

In addition, Samaras said Greece has resources to recover from its economic crisis.  Greece has been at the epicenter of the eurozone debt crisis and is experiencing its fifth year of recession, while harsh austerity measures have left about half a million people without jobs.

Greek banks are in a shaky position, and pensions and salaries have been slashed by up to 40 percent.  Greek youths have also been badly affected, and more than half of them are unemployed.

The long-drawn-out eurozone debt crisis, which began in Greece in late 2009 and reached Italy, Spain, and France last year, is viewed as a threat not only to Europe but also to many of the world’s other more developed economies.

Germany’s Economic:

Germany’s leading banking and financial services company, Deutsche Bank AG, reportedly plans to slash several thousand jobs amid restructuring aimed at saving the business billions of euros.

German-language Suddeutsche Zeitung daily reported on Friday that the program would primarily focus on reducing headcounts at finance, risk, personnel, book keeping, economic analysis and legal departments.

The report added that 543 jobs at the headquarters of both Deutsche Bank in Frankfurt and its subsidiary, Postbank, in Bonn could be the first to be affected.

The Suddeutsche Zeitung also said the works council has already been briefed about the changes, and has received a framework outlining a social plan.

Meanwhile, a spokesman from Deutsche Bank told the Suddeutsche Zeitung that no job cuts are planned.   “Together with the Postbank we have been in constructive discussions for the past year and a half with the works council about future personnel developments,” he said.

Spain’ Econimic:

Spain’s bad bank loans have hit a record high in 50 years as the European country struggles with an ailing economy due to the eurozone deteriorating debt crisis.

Statistics from Bank of Spain indicated on Tuesday that the value of bad debts held by the country’s banks climbed to its record high of 9.8 percent in July to reach 169.3 billion euros.  Data showed that one in ten loans deemed to be at risk up from 9.42 percent a month earlier.

Doubts about the extent of Spain’s non- performing loans problem is hurting bank stocks and driving up the government’s borrowing costs on investor concerns that the expense of propping up ailing lenders may add to the debt burden.

Spain has announced spending cuts of more than 11 billion dollars as well as tax increases to reduce the country’s deficit to avoid seeking a financial bailout like Greece, Ireland and Portugal.

Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, destroying millions of jobs. Analysts say Spain’s economy is expected to enter into a new recession in the first two quarters of 2012.  Europe plunged into deep financial crisis in 2008, which has continued to intensify in recent months.

Economic Measurement from Austria

Austria’s foreign minister has called on the eurozone countries to create an exit mechanism, which would allow that the failing member states be expelled from the single-currency bloc.

“We need to create ways to be able to eject someone from the eurozone,” AFP quoted Michael Spindelegger, who is also the country’s deputy chancellor, as saying on Thursday.

Spindelegger said the legal mechanism would be for countries “that don’t meet their commitments,” noting that such a mechanism would bolster market confidence in the euro.  “If we already had this…then we would already have drawn the consequences,” he said.

The centre-right politician is said to have made the remarks in reference to Greece, which has already secured two bailout packages and could need more.

Greece has promised to cut EUR 11.5 billion off its 2013-14 budget in order to get bailed out by other eurozone countries and the International Monetary Fund.

The European Union and the IMF have presented Greece with two rescue packages in return for specific austerity measures, which include the cutting of public sector salaries and pensions, increasing taxes, and overhauling the pension system.

The long-drawn-out eurozone debt crisis, which began in the country in late 2009 and reached Italy, Spain, and France last year, is viewed as a threat, not only to Europe, but also to many of the world’s more developed economies.

Measurement from Professionals:

According to billionaire financier George Soros, “In my judgment the best course of action is to persuade Germany to choose between becoming a more benevolent hegemon or leaving the euro. In other words, Germany must lead or leave,” Soros wrote in an article published in the New York Review of Books last week.

“The difficulty is in convincing Germany that its current policies are leading to a prolonged depression, political and social conflicts, and an eventual break-up not only of the euro but also of the European Union,” Soros argued.  Soros, 82, has frequently criticized Germany for its insistence on austerity.

Since the Eurozone’s mountain of debt is denominated in euros, “it makes all the difference who remains in charge of the euro,” he said.

“If Germany left, the euro would depreciate. The debt burden would remain the same in nominal terms but diminish in real terms. The debtor countries would regain their competitiveness because their exports would become cheaper and their imports more expensive,” Soros said.

In a decision that sent markets booming, the European Central Bank last week announced it could buy unlimited amounts of the bonds of struggling countries to bring down their soaring borrowing costs.

While chancellor Angela Merkel insisted the ECB was acting within its mandate, the Bundesbank, as well as several politicians and media in Germany slammed the decision as providing a “blank cheque” to profligate euro countries.

Norway’s Economic Measurement presented by Prime Minister Jens Stoltenberg to Newsweek’s Jerry Guo Interviewed:

The Daily Beast reported that Norway was the only Western industrialized state to escape the global economic meltdown relatively unscathed. It boasts a healthy banking sector, record-low unemployment, and one of the hottest sovereign wealth funds around.

“During the height of financial meltdown in 2008, Norway actually grew by 2.2 percent, but GDP did fall during 2009.  Anyway it started to grow again at the end of 2009. The important thing is we have managed to keep unemployment down, the lowest unemployment in Europe. It’s now at 3.3 percent which is not much higher than before. The reason is we conducted a classical countercyclical policy when the financial crisis hit Norway.”  Norway increased demand by reducing the interest rate from 5.75 percent to 1.25 percent and we increased demand by expanding the fiscal stimulus.

But fiscal stimulus and monetary expansion sound pretty orthodox.  “One thing is we have a flexible labor market and this flexibility in the supply has contributed to the low unemployment. And one special thing Norway have are strong and responsible trade unions. We, for instance, agreed on a very big pension reform, which is estimated to reduce expenditures on pensions by 3 percent of GDP in the long run.”

Banking sector is healthy. Many learned from the financial crisis in the 1990s when several major banks were taken over by the state. Second, Norway have good regulations covering the whole financial sector. One lesson Noway have learned from other countries is that if you have regulations not covering the whole sector, you create loopholes.

Country’s $450 billion sovereign wealth fund actually bought $175 billion in stocks when the markets were still crashing. Norway bought a lot of stocks during the financial crisis for two reasons. One is that Norway decided in 2007 to increase the proportion invested in stocks from 40 to 60 percent. Stock prices were going down so Norway have to buy more stocks. “We are small owners in around 8,000 different companies around the world, including emerging economies in Asia like China and India. We are a very long-term investor.”

The fund, the single largest investor in European stock markets, returned 25 percent in 2009. Norway regained almost all of what the country lost in 2008 in 2009. Norway don’t sell when share prices are low. “We can afford to remain [in the market] during the bad times. We have the most transparent and most predictable investment fund in the world. The reason we have this sovereign fund is we have saved most of the oil revenues rather than spend them on tax cuts. Our value-added tax is 25 percent and gasoline price is $8 per gallon. The whole idea is to replace our national wealth from oil and gas in the ground to equity and bonds in the international market. It has been important for the Norwegian government to avoid Dutch disease by not spending too much,” said Jens.

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