Tag Archives: euro crisis
The European right is capitalising on a crisis

The European right is capitalising on a crisis

I have been out of the loop the past two weeks and not posting much, but that is about to change as I embark on a project or two for the site…

For one thing, I am going to start doing some research into how the austerity programs will be implemented and set up a bit of a web template for each of the twenty G20 countries to follow their ‘progress’ in implementation and look at the real world effects it is having on their populations. I will be doing some other research and writing as well on other G20 related topics, including following Wall Street’s ‘recovery’ at the same time all these austerity measures are being put forward.

In the meantime (over the next week or so), I will be posting articles such as this one to keep people up to date on what others are writing.


The European right is capitalising on a crisis

Eurozone governments and European authorities are using the economy to justify pushing through rightwing policy changes

One thing should be made clear about the situation in the eurozone economies that is not clear at all if we rely on most of the news reports. This is not a situation where countries face a “dilemma” because they have overspent and piled up too much public debt. They do not face “tough choices” that will force them to cut spending and raise taxes while the economy is weak or in recession, in order to “satisfy financial markets”.

What is really going on is that powerful interests within these countries – including Spain, Greece, Ireland and Portugal – are taking advantage of the situation to make the changes that they want. Perhaps even more importantly, the European authorities – including the European commission, the European central bank and the IMF – who are holding the purse strings of any bailout funds, are even more committed than the national governments to rightwing policy changes. And they are further removed from any accountability to any electorate.

In 13 Bankers, by Simon Johnson (a former chief economist at the IMF) and James Kwak, the authors describe the emerging market crises of the 1990s and note that Washington used them to promote changes that it wanted: “When an existing economic elite has led a country into a deep crisis, it is time for a change. And the crisis itself presents a unique, but short-lived opportunity for change.” Naomi Klein, author of The Shock Doctrine, provides an excellent history of how crises have been used to introduce or consolidate regressive and unpopular economic “reforms”.

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Euro crisis and response: shock and awe

Euro crisis and response: shock and awe

A lot of the talk this past week has been on how to deal with the Euro crisis, and it will be a key topic at the G20 meetings.

The favored approach is to call out Greece as an example of bloat, cut state budgets, let markets work their magic, and do anything to keep the stock market on track. The 1 trillion dollars to offset the crisis is seen as swift action, but this is public money once again spent to ensure that private creditors are paid. It is always in the form of “we have to, or it will all collapse”, but shouldn’t we start looking at the root causes and long term-effects? What a roller coaster. And the ride has barely begun.

Here are a few articles for context:

  • Can the Euro be Saved? Germany (and its Constitutional Court), partly following popular opinion, has opposed giving Greece the help that it needs.

To many, both in and outside of Greece, this stance was peculiar: billions had been spent saving big banks, but evidently saving a country of eleven million people was taboo! It was not even clear that the help Greece needed should be labeled a bailout: while the funds given to financial institutions like AIG were unlikely to be recouped, a loan to Greece at a reasonable interest rate would likely be repaid.

  • Financial Reform “Fighting to reduce government budget deficits during the worst recession in over 80 years is not only bad, it is insane — unless you are an opposition political party trying to prolong the recession for partisan political gain.”

“Failing to provide fiscal stimulus today will prolong the recession, continue to depress tax revenues indefinitely, and increase the national debt over the long-run.”

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