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The dominant one: The crisis is caused by government deficits and must be solved by reducing government spending and raising taxes on the poor. Main problem is feckless poors and southerners.
IM's alternative: The crisis is caused by government deficits and must be solved by raising taxes on the rich.
Jake's & Mig's alternative: The crisis is caused by EMU rules limiting government deficits and must be solved institutional reform to allow deficit spending.
Please correct me if I am wrong when stating the positions, but if I am right paiting either side as collaborating with the right-wing narrative in one is unhelpful. Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
There are two distinct but related problems. The first is that the EU as currently constituted lacks an investor of last resort. The second is that it lacks any means to ensure that internal current accounts imbalances do not become a political problem.
There is a variety of possible reforms that would solve these problems. A European treasury not subject to silly "debt brakes" would solve both problems, but may be politically unpalatable. Repealing the GSP and Art. 123 would solve the investor of last resort problem, but not (necessarily) the current accounts imbalances. A Bancor-type arrangement would solve the internal current accounts problem (or rather, signify political acceptance of the existence of otherwise unsustainable imbalances), but would not solve the problem that the GSP circumscribes the states' ability to perform investor of last resort functions.
Finally, the physical economy of Europe (in particular the periphery) has the problem that thirty years of neoliberal brain rot (twenty in the case of Eastern Europe, but with much weaker countervailing pressures) have rendered large swathes of Europe into a wasteland, industrially speaking.
- Jake Friends come and go. Enemies accumulate.
Bingo. She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
Of course, absent neoliberal brain rot, nobody would have thought that a currency union could work without fiscal integration.
the -Mark, as currently constituted, would not be viable.
It doesn't matter if the debts are measured in Euros, DMs, Pesos, or the soon to be offered New Mexico Tamale. If the people who owe the money can't make money to pay it off, they don't have the money to pay it off, thus, they can't pay it off.
Maybe I'm the dumbest m/f'er on the planet, but this seems Real Simple. To me. She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
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