Illustration: Liu Rui /GT Europe has entered 2014 still suffering from its traumatic debt crisis. Although perspectives for the future remain unclear and risks are high, there is also good news. Financial markets are relatively quiet as 2013 was a calm year over the course of which no "accident" occurred. Ireland managed to exit its bailout program in December, while Spain decided to go it alone and stop receiving rescue loans for its banks. For its part, Portugal has already started planning to issue government bonds, highlighting real possibilities for a return to the markets. Additionally, Cyprus , which came to the brink of bankruptcy in March 2013 , and finally asked for financial support, has shown progress in complying with its international obligations. Even Greece , the weakest link of the eurozone, has reduced its budget and current account deficits, and in spite of its important structural problems and additional financing needs, has almost escaped from the danger to return to its own national currency. The political instability in Italy in the first months of 2013 did not lead to a parallel economic crisis. Although a national government wasn't formed until the end of April, for instance, the spread of sovereign bonds was remarkably stable. Last but not least, the beginning of 2014 marks the expansion of the eurozone. Latvia joined as the 18th member. As far as decisions at the European level are concerned, the most critical was made in December in Brussels . According to the agreement of the 28 members of the EU, bank shareholders and creditors will share losses of failed banks for amounts over 100,000 euros ( $137,000 ) in the future. This method was first applied in the case of Cyprus and will constitute a significant shift in the European economic approach. Taxpayers will no longer contribute to rescue packages and lower amounts of public money will be spent. But does all this mean that politicians are steering Europe out of the crisis? The answer to the question is mostly negative. The fundamental problems have not yet been solved. Asymmetries between northern and southern countries continue to outline existing divisions which are played out at the economic level as well as in public opinion stances.Ironically, one of the main elements often uniting people in the 28 member states is their common distrust for the modus operandi of the EU. According to Eurobarometer statistics, there is an increasing tendency of euroscepticism across the board. In Germany , for instance, a newly founded party named Alternative fÜr Deutschland advocates for the breakup of the eurozone. This party has almost reached the 5 percent threshold to enter parliament in the federal elections of September 2013 and will be possibly successful in the elections to the European Parliament in May this year. There are now intellectuals in France who do not hesitate to question the sustainability of the common currency. FranÇois Heisbourg, one of Europe's leading strategic thinkers, for instance, explores the end of the European dream in a recent book. Europe does not lack proposals or concrete ideas on how to overcome its debt crisis. Almost all scholars agree that the creation of a banking, fiscal and political union is a necessary pre-requisite for an organization which has its own currency without being a state. What Europe lacks is the political appetite to quickly proceed with these radical reforms. The need to act in 2014 is unquestionable. But breakthroughs can hardly be expected.In her annual new year's video message German Chancellor Angela Merkel focused on the importance of Europe in her country's progress. French President FranÇois Hollande spoke of the great success of the EU. But words, however pleasant, are easy. As long as no specific measures to reduce poverty and unemployment are taken, Europe will be alienated from its own citizens, especially the younger generation. This bad news can be even worse. The ongoing economic and social crisis may be complemented by a new worrying dimension in the aftermath of the coming European Parliament elections: an existential political one.The author is a research fellow at the Hellenic Foundation for European and Foreign Policy . firstname.lastname@example.org
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