MOSCOW, July 30 (RIA Novosti) – The European Union is making a mistake in jeopardizing its ties with Russia through stiffer sanctions at a time when the crisis-plagued global economy is about to be hacked into chunks along geopolitical lines, according to renowned French economist Jacques Sapir.
“Our nations should cooperate with emerging economies and Russia, rather than invent pretexts for fighting them,” Sapir said in an interview with International Information Agency Rossiya Segodnya.
The economic pundit stressed that the European Union has been plunged into a profound crisis that reflects a general tendency toward disintegration, which is now tearing the world asunder.
“It’s becoming all too clear now that there’s no real unity in Europe and that the European Union is going through an exceptionally deep crisis. A new round of financial crises began about two to three weeks ago when Portugal entered a serious banking crisis that will spill into the European Union and Eurozone in a few weeks,” Sapir warned.
The French economist said another round of global “defragmentation” is underway, and it could split the world into several EU-type “mega-regions” with their own currencies, regulations and financial institutions.
“Today we are witnessing a second round of global defragmentation, although I believe the very idea of a unified world without any rough edges was nothing but a mirage,” Sapir said.
“The current defragmentation of the world has been caused by emerging economies and America’s political shortcomings,” Sapir added referencing a US lawsuit against Paris-based BNP Paribas that put European regulators in a flutter over potentially massive US fines.
According to the financial analyst, the recent move of the world’s leading emerging economies, the BRICS – Brazil, Russia, India, China, and South Africa, to set up their own emergency reserve fund and a development bank in a bid to free themselves from western dominance could further alter the global economic establishment.
“If these nations succeed in creating their own alternative to the dollar, the setup will definitely begin to change. One of the theories predicts US isolation and the rise of its own union with Canada and Mexico,” Sapir said describing a hypothetical North American monetary union, also known as NAU.
The NAU, an economic and monetary pact between the United States, Canada and Mexico, envisions the three nations giving up their currencies in favor of a single one, most often referred to as the “amero.”
“But the main question is how long it is until the US dollar stops being the global reserve currency,” Sapir pointed out.
Many experts have been speculating that only 10 percent of US dollars in circulation are “backed” by gold as a result of a series of economic measures taken by the Nixon administration as far back as in 1973. Since that time, the dollar has not been pegged to gold, the pundit said, adding that US military might has today replaced gold as the main guarantee of its value.