Europe in flames, a direct response to Austerity.
Violent clashes in Spain, Greece and Portugal are crashing across our news channels and yet the responses from commentators (and the rest of Europe) are incoherent at best.
The lack of application to a historical context is hampering the analysis.
The frightening similarities with the depression of the 30’s and the wrong economic responses by governments has set us on the path to a disastrous outcome. The Euro (designed to build peace and cooperation into the foundations of Europe) is exacerbating the problem.
Like the treaty of Versailles the imposition of pain (in economic terms) is the driver of discontent among those being forced to endure.
In Greece the pain is excruciating, in Spain and Portugal the rebelling is beginning and the screams for extreme responses are being answered by the extremist parties. Independence in Catalonia (Spain’s wealthiest area) is a symptom of not wanting to all be in this together.
The political crises of repeated elections in Greece are beginning to see the wilder parties get a foothold on the democratic ladder.
All of this occurred in Germany through the Weimar mess and the rise of National Socialism. An echo that the EU should not ignore. When times are very hard (and seemingly unfair) with no hope of improvement the electorate begin to respond to the hopelessness by moving to the political extremes. Good people pushed past breaking point. Already this is being seen on the streets of Athens, Madrid and Lisbon.
Grexit and some contraction of the eurozone is vital if all of southern europe isn’t to descend into a disaffected mess. The appointment of unelected bureaucrats in Italy and market-forced government changes, in other states, put a huge pressure on democracy in southern Europe. These enforced changes give grist to the mill of extremists, a visible object to blame. How far the descent towards the far right (or left) goes is anyone’s guess. An alarming prospect nonetheless.
The ineffective bailout programme is the wrong response and is just prolonging the agony. The increasing debt levels will need to be written down (or off) and Greece allowed to get out of the Euro. Greece will never be able to repay the debts that are compounding. Of course were this to occur a few others would begin the escape process too. An ordered restructure would become a rout. Not a pleasant thought for the markets who wouldn’t so much be getting a haircut, more like a number 1 all over.
The austerity agenda is killing the patient and the patients are about to tell the doctor where to stick his medicine.