Glance at Europe

Ajgul TULEMBAEVA

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Just recently many European mass media presented Kazakh program “The way to Europe”, developed in accordance with the Letter of Kazakhstan President “Improvement of the well-being of Kazakhstan people – is the main objective of the state policy”. In respect with the Concept of the Republic of Kazakhstan foreign policy, the development of comprehensive cooperation with European countries is a strategic interest of Kazakhstan. We intend to integrate into the process of European cooperation and development, to use to the maximum the potential of technologic, energy, trade and transport cooperation.

In this context it is useful to compare the anti-crisis measures of our and European countries. Can we at least talk about integration into Western union?

Let’s consider the difference in anti-crisis approaches on the example of Germany, so much that our Presidents will soon visit this perfectly developed European country. German economy remains one of the most stable in Europe even despite the world financial crises. Moreover the economy of the Federal Republic of Germany becomes a locomotive of European economies stabilization.

German government allotted for its national economy a stabilization fund of 490 billion euro, with possible extension to 500 billion euro for a good measure. German economy has never gained such a huge stabilization fund in its history. To compare: total expenditure budget of Germany for 2008 is 283 billion euro.

However, only 90 billion euro of this gigantic sum went into expenditure budget: this is the sum that as assumed will be paid till the end of 2009 for bankrupt banks. Remaining 400 billion euro – is the ground for soft credits for crisis banks. The law adopted in the end of October 2008, anticipates that any German bank can apply to receive 20 billion euro soft credit, by this the government gains the right to influence current operations, including setting managerial salaries.

It means that the support of the German government is provided only for financial sector in comparison with our program that specifies significant measures towards real sector of economy. I assess this situation as follows.
 
The German government has always supported its real sector, i.e. agriculture, small and medium businesses, and infrastructure have been a priority in the periods of normal economic development of the country. Today financial structures incited the crises, and not necessarily due to their fault (if to consider German banks). That is why it is a targeted support. The Government doesn’t interfere into distribution of soft credits. Banks use them in accordance with their demands and have no limitations in the choice of creditworthy businesses. This happens because German economy is balanced. The support of financial sector always influence total economy.

Our economy is absolutely unbalanced, that’s why we provide support in all directions. Because it was perfectly known even before crisis that agricultural sector decayed, that small and medium businesses experienced plenty of problems, that infrastructure had wasted its resources almost completely. However, the measures to improve the situation weren’t taken at all or demonstrated their inefficacy. Today the activation of all state measures is directed to maintain social stability; measures are taken to prevent mass unemployment and dissatisfaction of citizens as it can threat the existing peace in the country. It turns out that Germany actively and responsibly supports the qualitative growth of economy, and we strive to preserve existing governmental agencies.

The reality that German government cares of its people is proved by the fact that the government is the most consistent supporter of introduction of liability for hired top-managers for the financial state of their businesses. Until now the heads of the biggest public companies have acted actively in the matter of the profits, but have taken financial risks unwillingly. The same as our companies. Our financial and some state top-managers push our country to default irresponsibly, without apologizing and carrying any liability.

German Chancellor Angela Merkel raised the issue of managerial profits almost a year ago: “Why should those who make mistakes have full pockets of money?”– claimed Merkel during the meeting of leading German managers. And I fully support this view. Why does a medium businessman loses everything after bankruptcy of his small enterprise, and self-assured bank top-managers after grave mistakes withdraw from their positions gladly taking their discharge pay?! The kind of assurance of guaranteed impunity presents extra risks to financial market.

Now German banks gaining state support should reduce greatly the profits of their top-managers. Besides, there is a draft law anticipating the liability of hired top-managers for financial failure of their enterprises. According to the law a manager whose actions caused bankruptcy can be fined up to the sum of his salary for the last two years. German politicians state that in this case it is not about interference into private companies, but only about “the very objective of the lawmaker to circle the borders of liability within civil and criminal law”. Exactly now, during financial crises it becomes evident that public interest states the necessity to fix managerial profits to long-term economic benefits of enterprises.”

Our government doesn’t connect the top-managerial liability to public interests. It doesn’t fine them and doesn’t trust them. Probably it happens because they are a product of our economic system, that didn’t care that much of public interests in the beginning.

So the difference in anti-crisis approaches is obvious. Most likely our way to Europe will be very long, if it not too short at all. For the start we need at least to make a glance at Europe, and than to talk over the way.

Translated from MEGAPOLIS