Europe’s “shaky banking system” must be strengthened for Greece’s future as a member of the eurozone to be secured, Vassilios Gouloussis, the Greek consul in Atlanta, said during a seminar at the Georgia Institute of Technology on Sept. 27.
Contrasting the strength of the U.S. national banking system where $1 in a Georgia bank has the same value as a dollar in a California bank, he said that in the eurozone euros in Greek banks were of lesser value than comparative funds in German or French banks.
Although he didn’t say so outright, it was clear that capital flight from Greece, which is undergoing protests in the streets by Greeks suffering from the government’s austerity measures, has further undermined the country’s economy.
Greece’s unemployment rate has been reported at more than 24 percent while Spain’s is over 25 percent.
Mr. Gouloussis also called greater confidence in the eurozone’s banking system “a prerequisite” for economic growth, which he said is necessary for job creation and economic stability.
Paul Gleeson, Ireland’s consul general in Atlanta, voiced the same opinion at the event held at the Wardlaw Center that was sponsored by the Center for European and Transatlantic Studies, the Office of International Education and the vice provost for international initiatives.
Alasdair Young, a co-director of the center, moderated the panel in which Vicki Birchfield, also a co-director; David Kibler, cultural attaché of the French consulate general, and Christoph Sander, the German consul general, participated.
Mr. Gleeson said that new European banking regulations are “long overdue,” and that banks had been at the heart of Ireland’s problems because they had fueled a real estate bubble.
Mr. Kibler referred optimistically to the positive impact the European Commission’s Sept. 12 package of reforms would have on creating a closer union if approved by the national governments.
Under the commission’s proposal, the European Central Bank is to supervise all eurozone banks and its reforms are designed to end years of financial turmoil in the region.
Germany’s consul general, Christoph Sander, pointed out that Germany already has promised 190 billion euros to keep the eurozone’s governments afloat.
But he said that traditional opposition to inflation from the Bundesbank, the German national bank; the German parliament and the German public should inhibit “expectations that we will write a blank check.”
Meanwhile, Greeks are having to survive with their salaries cut in half and endure severe austerity measures, Mr. Gouloussis said.
But he was not entirely pessimistic. “We have taken some steps forward and we can take more steps forward,” he added, saying that he was more optimistic about the future than he had been two or three months ago.
Dr. Birchfield said that the development of the European Union had been mostly a political project over the past 60 years and that it was only now that the economic union was being developed.
She pointed out that the turmoil could only be eased once new policies addressed the realities that financial markets are global while policy instruments, such as those proposed by the EC are regional and politics are national.