Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Great Leap Forward blog: MMT, THE EURO, AND THE ROAD TO RECOVERY: Interview with L. Randall Wray (conducted by CJ Polychroniou for the Greek national financial daily Express)
Q: You have written a great deal about the euro crisis, including the Greek crisis. In your view, did Greece have much of a choice when it ended up under an EU/IMF rescue mechanism, or should it have managed somehow an orderly default and returned to the drachma? This is a position taken by a number of economists both in Europe and in the US. Where do you stand on this?

A: Here's what I recommended for Greece, Ireland, Portugal, Italy, and Spain. You must band together, making a pact that you will not allow the center to pit one Euro member against the other. Together you demand an end to austerity, or you will leave the EMU--all for one and one for all. Debt relief for all. Substantial fiscal stimulus from the center for all. A job guarantee program for all. Without that, all of you leave. Make it clear. Make it believable. And leave if the center does not stop the austerity. You do not need to serve Germany's domestic policy agenda.

Q: The contractionary policies and the harsh austerity measures advocated so passionately by Germany and the EU leaders as a means for the peripheral nation of the euro zone to deal with their fiscal and debt problems, regardless of how they arose, have proven to be absolutely catastrophic for those economies, causing massive human suffering and stalling global growth. How do you explain the persistence of EU chiefs and certain capitals on having Greece and the other indebted euro zone nations stay the course when the results are so devastating?

A: As discussed, domestic politics combined with some desire to impose labor discipline have got Euroland to the present situation. Here's the problem. Those who are powerful in the center view exports as the path to prosperity. Germany is of course the most successful at that. While Germany is huge within the EU it is relatively small compared to the global economy. It is conceivable that Germany can hold costs in check while innovating, improving efficiency and focusing on high value exports to create demand for its output (many of those exports staying within the EU, of course). Perhaps Germany can hold its own against Asia and the Americas. But this strategy has no chance of succeeding for Europe as a whole. The world is not big enough to supply demand for Europe's potential output, while Martian demand is at best speculative. And everywhere else has cheaper labor than Europe's. So Germany insists on belt-tightening and cost-cutting throughout Europe, which cannot work because Europeans cannot reduce living standards to those of Viet Nam. And even if they did, that kills Germany, too.

If one were extremely cynical, one would conclude that Europe's leaders understand all this but don't give a damn because they plan to move all jobs to Asia anyway. They are globalists, not nationalists or even Europeanists. Europe can wither and die, and Europe's megacorps would find outlets and workers in China. It is possible that this is the true strategy. It wouldn't be the first time--look at Japan, which moved jobs abroad and killed their own economy. I don't know.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 10th, 2013 at 04:02:38 PM EST
We've come along way to a strange place when American letist academics call for nationalist leaders in Europe.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Feb 10th, 2013 at 04:16:28 PM EST
[ Parent ]
Europe already either has or can no longer avoid nationalist leaders.

The question is whether they will be the fascist or the socialist version of nationalist...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 10th, 2013 at 08:16:52 PM EST
[ Parent ]
When push comes to shove, liberal democracy prefers the fascist version.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Feb 11th, 2013 at 04:22:31 AM EST
[ Parent ]
From today's Eurointelligence:
Spanish opposition leader gives a strong anti-austerity message

Spain's opposition leader Alfredo Perez Rubalcaba gave a strong anti-austerity message at a meeting in Turin in support of Bersani (video and transcript), which shows that the moderate left in Europe is beginning to distance itself with increased clarity from the policies currently pursued.  He said that in today's Europe, Angela Merkel calls the shots. The price was a rise in euroscepticsm to such an extent that the country would no longer approve a constitution in a referendum, as it did last time. He was especially scathing about the budget agreement, which set aside only €6bn for youth unemployment - in contrast for the €40bn in lending to banks.

Here is my paraphrased translation of Rubalcaba's words:
I come from a firmly pro-European country which is only receiving from Europe 'men in black', reprimands, cuts in social rights, and austerity and moral scolding; and which relieves that today in Europe Angela Merkel and she alone calls the shots. And they are right, because in Europe only Angela Merkel and the European Right call the shots.

I come from a country which, were it to vote on the European Constitution today, might not approve it like we did some yeas back. Because the European Right which is imposing suffering as a way out of the crisis is making euroscepticism grow in my country. We have to convince many people in Southern Europe who have become Eurosceptic because of these policies by the European Right that more Europe is needed to get out of the crisis.

On the European budget Spaniards wonder how it is possible for Europe to lend €40bn to the banks and only thought of setting aside €6bn for youth unemployment. How can we defend a Europe that gives four, ten times more to financial power than to young jobseekers? This has to change.

We have to remind the European Right that they are a machine for creating Eurosceptics.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Feb 11th, 2013 at 04:25:19 AM EST
[ Parent ]
Spain's opposition leader Alfredo Perez Rubalcaba gave a strong anti-austerity message at a meeting in Turin in support of Bersani

What is Bersani's position on austerity? (And Monti's government record?)

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Feb 11th, 2013 at 09:30:11 AM EST
[ Parent ]
he supported monti's makeover, and now promises to take a different route, less radically opposed than berlusconi, who's promising to give cash extracted through monti's house and land tax (except on the vatican property).

bersani has just words, and his party is involved in the MPS bank scandal, so is losing votes to that. he is conspicuously silent on the greening of the economy, leaving those votes to grillo.

if i understand correctly the 5*ers will have 100 seats in parliament.

i think most italians are realising bersani has nothing new to bring to the table really, he was there to pick up centrist voters disenchanted with satyrism, who are forgetting their disgust at the prospect of a cheque in the mail.

beppe is on a roll meanwhile, his campaign speechifying finally on the daily tv news... too big to ignore at this point, which considering the craven italian media is no mean feat. the wall is breached, and considering how many arrests were made today of 'excellent' big fish, it seems like the magistrature will have its hands full for a while.

berlusconi stuck his foot in his mouth also, saying we should be realistic and accept that bribery is just a fact of life and it is auto-lesionistic, pure masochism to pretend that italy can run without it, in other words to attack it is a form of treason against the homeland. (and all the judges are commies, yawn)

i hope oliver stone does a biopic of this guy soon, it could out-do nixon's for the viscosity factor alone.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Feb 14th, 2013 at 08:41:40 PM EST
[ Parent ]
I immediately get worried that Berlusconi will end up largest since they were in second place last time I saw the polls (and since largest gets automatic majority in a mockery of proportional distribution).

Saw on wikipedia that polling is not done the last two weeks. Any non-italian (swiss?) polls similar to the belgian polls of french elections?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Feb 15th, 2013 at 09:44:39 AM EST
[ Parent ]
I swear that the virtually identical recommendations I made over the last three years for Greece, Ireland, Portugal and Spain did not derive from an awareness of this aspect of Wray's work. :-)

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 11th, 2013 at 02:22:51 PM EST
[ Parent ]
How do you explain the persistence of EU chiefs and certain capitals on having Greece and the other indebted euro zone nations stay the course when the results are so devastating?

From the point of view of German and ECB leadership it is probably that none of the victims has made an effective protest against austerity and that there is no unified front opposing current policies. The leadership of too many of the countries that could band together to force change remain too sufficiently enthralled by the vision of the European Union to accept that current leadership has gone so wrong that the consequences of maintaining the status quo outweigh the consequences of a dramatic break. And then there would have to be a clear alternative, preferably only one, but it is essential that they understand that they are decisively at the end of the current policy path.

Most of the current national leaders represent wealth much more than they represent their own electorates or constituencies and current policy plays to the prejudices of the wealthy very well. The only way things will change is if current leadership is presented with a stark choice. Even if they understood the situation and agreed there were serious problems they will likely only take effective action if and when the alternatives are even more bleak.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 11th, 2013 at 02:51:22 PM EST
[ Parent ]
The leadership of too many of the countries that could band together to force change remain too sufficiently enthralled bribed

FIFY.

What's the news from Spain and Greece about this?

I mean really - who thinks this isn't happening?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Feb 11th, 2013 at 03:17:29 PM EST
[ Parent ]
They don't need to be bribed, they're kleptocratic.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Feb 11th, 2013 at 03:47:42 PM EST
[ Parent ]

Display:

Occasional Series