For all the back patting between the Euro leadership and the self congratulation that the crisis is over and that the Eurozone (at least the part of it that counts, the North) is all set for a bounce back and recovery, thing don’t look that rosy, now do they?
All of a sudden France is being told it risks becoming the new Greece! Horror of horrors! Recession does not look as if it is ready to change, the chief austerian par excellence Olli Rehn with his nonsense economics, papal infallibility and above all that he is not obliged to answer to anyone, is firmly in the saddle, applying more and more of his deadly arsenic in greater doses.
The Guardian tells us that:
Paul De Grauwe of the London School of Economics and Yuemei Ji of the University of Leuven argue that fear and panic led to excessive, and possibly self-defeating, austerity in the south while failing to induce offsetting stimulus in the north.
And are quoted as saying:
The intense austerity programs that have been dictated by financial markets create new risks for the eurozone. While the ECB 2012 decision to be a lender of last resort in the government bond markets eliminated the existential fears about the future of the eurozone, the new risks for the future of the eurozone now have shifted into the social and political sphere. As it becomes obvious that the austerity programmes produce unnecessary sufferings especially for the millions of people who have been thrown into unemployment and poverty, resistance against these programs is likely to increase. A resistance that may lead millions of people to wish to be liberated from what they perceive to be shackles imposed by the euro.
And the saddest thing of all perhaps, is that the fundamental problems of the real flaws in the Euro design, the ones that have created all the problems are not only not addressed by anyone, but not even mentioned.
In her great triumphant coup when The Frau got everyone to sign in blood that they would not let their deficits exceed 3% of GDP on pain of penalties (and even death?), she purposely omitted the much needed balance to that. That no country should be allowed to have a surplus of over a certain level either!
In other words, since the imbalances inherent in the design of the Euro, which are what have created all the problems, are, for the moment, in Germany’s favour, then nobody dares mention them.
However, if the Eurozone and perhaps even the EU itself is to survive, these problems must be addressed, they must be resolved quickly and all this pottering about with ideas and decisions and conferences and so on with the sole purpose of imposing stringent austerity and NOTHING MORE are not only counter productive because of the deep harm they actually do…
But also because they provide the excuse and the smoke screen for The Frau to hide behind and do nothing that could be beneficial to the EU as a whole and its ever more precarious future.