Greece: if austerity doesn't work... Try more austerity! | 287 comments (287 topical, editorial, 0 hidden)

Re: If austerity doesn't work... Try fascism! (4.00 / 8)

We cannont say we weren't warned: Barroso to plebes: nice indebted democracy you have there... by Migeru on June 17th, 2010

Europe's Economy 'Returning to 1930s' - BusinessWeek
"This is extremely dangerous. This is 1931, we're heading back to the 1930s, with the Great Depression and we ended up with militarist dictatorship," the general secretary of the European Trades Union Congress (ETUC) said in an interview with EUobserver. "I'm not saying we're there yet, but it's potentially very serious, not just economically, but politically as well."
...
"I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: 'Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They've got no choice, this is it'."

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 08:33:51 AM EST
[ Parent ]

Reform or else! (4.00 / 2)

We have indeed been warned repeatedly by the ECB, too:

Bini Smaghi: the euro is not too strong - Il Sole 24 ORE
According to our analysis, debt restructuring would result in the failure of most of the Greek banking system, which holds bonds of that country and is largely guaranteed by the state. Greek banks would no longer have access to refinancing with the ECB and would have to reduce their lending to households and businesses. Not to mention finally the impact on individual investors, pension funds and other Greek institutions that hold their savings in government bonds. The Greek economy would be on its knees, with devastating effects on social cohesion and maintenance of the democratic system in that country. Ultimately it's up to Greece to decide the way forward, given that it will face the worst of the consequences. But other countries should avoid pushing Greece towards disaster.

EUObserver: ECB warns of threat to Greek democracy (15.04.2011)

ECB board member Lorenzo Bini Smaghi warned on Thursday: "According to our analysis, a debt restructuring would result in the failure of a large part of Greece's banking system."
He did not mince his words, saying that Greek democracy would be threatened by such a move.
"The Greek economy would be on its knees, with devastating effects on social cohesion and the maintenance of democracy in that country," he told financial daily Il Sole 24 Ore.
He also subtly told Berlin to not push Athens into a corner.
"Ultimately it's up to Greece to decide the way forward, given that it will suffer the worst consequences. But other countries must avoid pushing it towards a catastrophe."

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 08:51:04 AM EST
[ Parent ]

Repeatedly... (none / 1)

Last December:

By Lorenzo Bini Smaghi (member of the Executive Board of the European Central Bank)
We're doomed.
Oh, and Godwin, Godwin indeed:
Migeru:
FT.com: Europe cannot default its way back to health by Lorenzo Bini Smaghi
Europeans have not forgotten the devastating effects that the expropriation of wealth, such as that carried out during the two world wars by way of inflation or defaults, may have on the economic and social fabric. There is awareness that, in the end, it may be less costly to tackle excessive public debt with the traditional remedies - that is, achieving an adequate level of primary surplus - rather than looking for quick fixes. There is also awareness that, without restoring economic growth, the debt burden cannot be reduced over time. This requires major structural reforms aimed at improving the functioning of the labour, capital and goods markets.
...
To understand what is happening in Europe, economics textbooks are useful but the history ones even more so.
The writer is a member of the Executive Board of the European Central Bank
(h/t Eurointelligence)
Apparently according to this guy the "devastation of the economic and social fabric of Europe" during the two world wars is associated by "Europeans" with "expropiation through inflation and default".

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 08:53:37 AM EST
[ Parent ]

Re: Repeatedly... (4.00 / 3)

afew:

Bini Smaghi:
a breakdown of the financial, economic, and social structure of our societies.
No less. So that is what our wise rulers are all so afraid of.
In order to avoid this
Bini Smaghi:
major structural reforms
of the "financial, economic, and social structure of our societies" are of course necessary.
So it would appear everything is going to be restructured anyway. Just depends in whose favour.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 09:02:19 AM EST
[ Parent ]

Re: Repeatedly... (none / 1)

Must... invade... Poland...

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jun 16th, 2011 at 11:55:41 AM EST
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Re: Repeatedly... (none / 1)

But they have to print money first!

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Jun 16th, 2011 at 12:40:39 PM EST
[ Parent ]

Re: Reform or else! (none / 0)

Top quote from here.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 09:21:16 AM EST
[ Parent ]

Greece: if austerity doesn't work... Try more austerity! | 287 comments (287 topical, 0 editorial, 0 hidden)