Bail out? the buckets are too small
The euro crisis has become an ongoing sore.
The markets are jittery and the governments in the eurozone are crapping themselves.
Austerity means different things in different countries. If Britain was to feel the cold, clammy hand of death that is greek austerity then we’d all be on the streets protesting. Our Austerity is much more British and involves limited cutting in the spending rate. Not actual cuts but reductions in growth. The austerity agenda has been a calamity. It has sucked demand from an, already, over supplied market. The cuts in Government spending has created a period of High Unemployment and recession. So it’s working then?
Austerity was the wrong economic choice. didn’t work in the 30’s won’t work now.
The Neo-liberal approach to economics is disastrous. Resulting in a market driven (remember it is jittery) approach that is unstable and driven by the most human characteristic, GREED. It cannot ever possibly be sustainable. Some will get very rich while the overwhelming majority suffer. Not a very positive outcome is it. (Remember 2bn people on a dollar a day)
How many more decades do we have to follow this market focussed view before we say enough?
And so back to Europe.
The prospect of a Spanish collapse or an italian one has us all a tremble. There was a reason why there were differential exchange rates. It had to do with prevailing conditions in these economies. They weren’t all the same.
Italy is not Germany!
Greece is Not Germany!
Spain is not Germany!
With one currency we are missing these points. Without budgetary integration the differences (subsumed for a while) have created cracks in the eurozone. The economies of these countries are different. A United states of Europe needs a United states of Europe based budget. ‘Over my rotting corpse’ is too often the response. Sovereignty is important to most countries.
Europe isn’t ready for political (and therefore fiscal) integration. The economies are too diverse and behaviours too different (tax evasion is an olympic sport in Greece and Italy).
A greater Germany approach to Europe will not work long-term. It is appreciated that German taxpayers are keeping the Euro on the rails but it is a step too far. Delor’s plan was too much, too soon.
A common market with few (if any) barriers to trade was what was needed, but full (or even) limited fiscal integration wasn’t needed. We are not creating a federal united states of Europe.
Within the USA there are similar problems of regionalisation, poorer regions that struggle due to a single currency (Nevada for example) and we in europe are replicating this problem.
Stop bailing out the eurozone economies and scrap the euro. It hasn’t worked and to hang on is only postponing the recovery. We do not have big enough buckets to do the bailing. The disintegration of the Euro needs to be managed, not chaotic. However, I see capital flights the moment this is announced (or before as rumours circulate). It will be painful.
I know this sounds eurosceptic. I’m not. An EU of trade and cooperation is as far as we need to go (ECHR notwithstanding). The economics of that trade are hampered by the Euro not aided by it. The inability of sovereign nations to manage their economies due to a currency straightjacket cannot continue indefinitely.
The experiment has failed. Accept it and move on (or row back obviously).
Either we speed the train towards a federal United States of Europe or we say stop!
We are not ready.
The bailout plans are sticking plasters to avoid the difficult question of what is our strategic goal. A question ‘we’ have ducked for decades, where is the EU really going? We know but don’t want to say it. United Federal States of Europe.
Good luck selling that. So we haven;t sold it, just crept along the road to it. Political Cowardice is too strong but conveys the point.