Merkel, Davos, and Yanukovych

On January 27 in Davos during the 8th Ukrainian lunch-con­fe­rence “Options for the Future” tra­ditionally organized by the Viktor Pin­chuk Foundation the Ukrai­nian Pre­sident Viktor Yanu­ko­vych took the floor and there was a discussion about Ukrai­ne’s future prospects in the context of the European and global development. Tra­di­tio­nally, in Davos global issues are touched upon. The world economic forum of this year attended by over two thousand leading businesspeople, top-ma­na­gers of international corporations, ban­kers, scien­tists, trade-union leaders, and high-ranking politicians is not an exception. The motto of this year’s forum that started with the discussion about the future of the capitalism is “The Great Trans­for­mation: Shap­ing New Models.” Some of its burning issues are the exa­cer­bation of the eurozone crisis and its affect on the world economy, fi­nan­cial regulation toughening, con­se­quen­ces of protests in different coun­tries, decline of people’s confidence towards authorities’ actions and private business. It is significant that before the forum one of the richest bu­sines­smen, founder of Micro­soft, Bill Gates, called the capitalism a “phe­no­menal sy­s­tem.” In his in­terview to BBC he emphasized that “we live in difficult times but there is no other system that has im­proved hu­manity.” Cer­tain­ly, the par­ti­ci­pants of the forum paid nearly the most of atten­tion to the speech of the Ger­man chancellor Agela Merkel who managed to talk to the leading businessmen and bankers be­fo­re­hand. Accord­ing to her, the world com­muni­ty has learnt few lessons from the global financial and eco­no­mic crisis. The German chan­cellor spoke against the large expansion of the future rescue funding program ESM. Though it is planned that ESM will have 500 billion dollars of credit value, there are the appeals to double or even triple it. Merkel thinks it is senseless. Instead of permanently in­crea­sing the amount of aid, the European countries have to merge and be ready to delegate more responsibilities to the EU so that the continent “turns into a Europe that works,” she em­phasized. The chancellor warn­ed against the excessive re­quire­ments from Germany. “If Ger­many pro­mises something that can’t be kept if markets attack it hard, then Europe is really vul­ne­rable,” Merkel em­phasized.

The Day addressed the European and Ukrainian experts asking them to comment the topics of this year’s forum in Davos and the declarations of the German chancellor. We asked them the following questions:

1. How would you assess the declarations made by Angela Merkel concerning the euro zone rescue?

2. Will Davos play any role in market economies “new model shaping” as it is stated in the topic of the current forum?

Arkadii MOSHES, expert of the Finnish Institute of International Affairs:

1. “I completely agree that the way out from the current situation is in centralization and giving large regulatory and supervisory responsibilities to the EU institutions. The problem was that a number of EU countries strayed far away from the obligations they had directly or indirectly taken when they had entered the EU. If it continues the EU will collapse. The idea of the measures suggested is right, another thing is that it is too early to speak about how successful it will be since these measures are several years late.”

2. “I think that the role of the Davos forum has been exaggerated for a long time. Traditionally, it was consi­dered important in the post-Soviet space. The situation is that because of peculiarities of the Russian post-Soviet history key decisions concer­ning Russia have been made in Davos. The integration of the post-Soviet elites into the world economic elites happens also through their pre­sen­ce in Davos, one of the discussion grounds with great traditions. However, the decisions are not made in Davos. There the situation is just discussed. It is an important forum but we have to understand that there are a lot of forums today.”

Ihor BURAKOVSKY, director of the Institute for Economic Studies and Political Consulting:

1. “The point is that to overcome a crisis a lot of efforts and expenses are needed. In other words, rescuing some countries exclusively on the expense of other countries is unacceptable. These are not only declarations but really coordinated actions since it has often happened that the declarations adopted by the EU and G20 were never rea­lized and remained recommendations. The third thing is that the current situation requires absolutely other effectiveness and other economic policy format. On the other hand, it is all about the extremely high level of mutual confidence of all the partners. The situation in Greece has demonstrated that the confidence in the economic policy and the information provided by the Greek government for many years did not contribute to it.”

2. “Davos is a forum where people communicate. It is not an international government or an organization like the UN or EU. We cannot expect any revolutionary decisions that will change the world, etc. This is the strong point of the Davos forum. On the other hand, we realize that it is a great forum giving a possibility to discuss various problems with interested parties: politicians, businesspeople, experts, intellectuals, orga­ni­zations, etc. We should not forget that the issues discussed in Davos are not just topics chosen by the organi­zers but the ones that really worry everybody today. What the politicians and countries bring from Davos and how they try to solve their problems at the national level is a question to them.”