Economic Challenges in the Twenty‑First Century 349Domestic constituencies affected by the economic distress include not only Greeks
who have stood in line at soup kitchens but also Cypriots whose bank depositors
are subject to capital controls, Spanish youth who face an unemployment rate of
50 percent, and the Germans who are paying the bailout costs. Th ese constituencies
are pressuring their demo cratically elected leaders for outcomes favorable to their own
interests. And what is best for sectoral or national interests may not be consistent with
Eurozone stability or the viability of the EU.
The future of the Eurozone specifically and the EU more generally is being debated.
Commentators differ on the prognosis. Economist C. Fred Bergsten acknowledges that
fundamental reforms of the Eurozone are necessary, including imposing tighter con
straints on government budgets— and enforcing them. If those goals are accomplished,
then the Eurozone will survive, but integration will prob ably slow down. As Bergsten
forecasts, “If the history of the continent’s integration is any guide... Eu rope will emerge
from its current turmoil not only with the euro intact but also with stronger institutions
and far better economic prospects for the future.”^22 thers predict that the crisis O will lead
to a “leveling off of Eu ro pean integration,” where policy makers are neither widening
nor deepening the EU.^23 And still another analyst points to a diff er ent future: “With
out some new driving forces, without a mobilization among its elites and peoples, the
EU, while prob ably surviving as an origami palace of treaties and institutions, will grad
ually decline in efficacy and real significance, like the Holy Roman Empire of yore.”^24
REsponsEs To EConomiC CRisEs
Crises do not affect all states equally and in the same way. While the Eurozone crisis
adversely affected Greece, Italy, Portugal, and Spain, forcing them to take austerity mea
sures, the global financial crisis did not have its anticipated effect in many countries of
Africa. Prior to the crisis, many African economies had been experiencing a resurgence
in terms of growth of real GDP, increase in private capital investments, unpre ce dented
Chinese economic activity, and even several multilateral debt relief initiatives.
Neither Ghana nor Kenya, for example, were directly affected by these crises. Ghana,
a long time world leader in both cocoa and coffee production, had been increasing
cocoa production, earning $2 billion annually from international trade, a 32 year high.
Because Ghana was also a major gold producer, it benefited from higher prices as con
sumers moved into gold to protect themselves from declining currencies. In 2007, the
country discovered a large petroleum field off its coast, and by 2011, the first oil flowed,
helping to spur its 7.7 percent annual growth rate. Private equity is now investing in proj
ects, and Ghanaians from the diaspora are returning.
Kenya, too, has not experienced the dire effects of the economic crises. Kenya, like
other East African states, is benefiting from private equity, including investment in