Greece Shows the Limits of Austerity in the Eurozone. What Now?

Yves here. We are doubling up on our Greece-related coverage today because the story is multi-facted and will continue to be critically important over the upcoming months. We also have some major mortgage-related stories in the works, and we will publish those next week.

By Lynn Parramore, Senior Editor at INET. Originally published at INET

Mario Seccareccia, professor of economics at the University of Ottawa, has been outspoken in his warnings that austerity policies have the potential to smash economies and spread untold human misery. In his work supported by the Institute for Economic Thinking and elsewhere, he has challenged deficit hawks and emphasized the need for strong government investment in things like jobs, education, health care, and infrastructure if economies are to prosper. In the following interview, he talks about why what happened to Greece was entirely predictable, why the Greeks were right to reject austerity in the recent election, and what challenges the country faces in forging a sustainable path forward with the left-wing Syriza party at the helm.

Lynn Parramore: You have long been warning of problems in the Eurozone.  What do the Greek elections mean to the debate about austerity and how it impacts economies?

Mario Seccareccia: I actually began warning about problems in the Eurozone even before they launched the Euro in 1999! A couple a years after the adoption, in 1992, of the Maastricht Treaty, which was the initial step in the creation the European Economic and Monetary Union or the Eurozone, I happened to be in Paris for the launch of a book that I had co-edited in French entitled Les Pièges de l’Austérité (The Austerity Traps) that had been published in November 1993.

During the discussions, a number of us were already raising very serious questions about a treaty which prevented national governments from doing what they needed to do to stabilize their economies — namely engage in needed deficit spending, regardless of the magnitude, during times of recession for the purpose of stabilizing income and employment. Some of us at the book launch warned of problems that could arise from a European supranational currency and a central bank which was not accountable to any national authority and which would push countries merely to become hostages to the whims of the financial markets. Along with many others, I’ve also raised concerns over what economists call “deflationary bias” in the structure of the Eurozone — that is, the tendency for policies to focus on lower inflation instead of more jobs and growth and to prevent greater public spending as a means to achieve growth.

I could see that Greece would be the country that would be hit first by these problems because it is financially the weakest link in the euro chain, and because of the high public debt ratio when it joined the Eurozone in 2002.  What is surprising is that it took until 2010 to reach such a crisis even though the warnings had been there for a long time.  Even at the start of the global financial crisis in 2008-2009, most European governments started stimulating their economies or bailing out their banks as we saw in Ireland and Spain. But no major cracks appeared until the end of 2009 when the financial markets got spooked because the Greek authorities were found hiding Greek sovereign debt with the aid of advisors of financial institutions.

From 2010 onwards, Greece achieved notoriety because financial markets recognized that the country might decide not to comply with the terms of loan agreements with banks. Eventually in 2012, European leaders held a summit at the French resort of Deauville and agreed that if the private holders of sovereign debt wanted bailouts, they would be held responsible for the losses. Because of these developments since 2010, deficit hawks everywhere vilified Greece for all the supposed terrible consequences of government over-indebtedness, even though the structure of the Eurozone made it impossible for Greece to manage its economy effectively.

Deficit hawks started preaching long-term austerity, and we’ve seen the awful consequences ever since. People have suffered terrible hardship and dislocation, with countries such as Greece and Spain reaching rates of unemployment worse that what happened in the United States in depth of the Great Depression. You’d be hard-pressed to find examples of such a severe collapse historically, with the possible exception of certain Latin American countries, such as Argentina in 2001. Those who predicted that that this austerity policy would eventually lead to an economic turnaround because of the belief in private sector rebound obviously got it wrong. After five years of negative economic growth, the Greek electorate — with incredible courage — told the so-called Troika that they had had enough, especially with these deep cuts in wages, employment, and pension transfers.

LP: How have the news media and the pundits gotten the story of Greece’s economy wrong?

MS: Ever since the end of 2009 when the story of Greece’s sovereign debt crisis began to unfold, austerity-pushing political leaders around the world have been saying that their country must not become the “next Greece.” Together with much of the international media, they have been perpetuating the view that government deficits are bad and that governments must seek balanced budgets, even if it means some necessary “temporary” hardship. Yet, the experience of the 1930s, which is being repeated with such vengeance in the Eurozone since 2010, is that pursuing austerity policies alone without some other outside stimulus, say, from increased net exports, can’t lead to balanced budgets. Instead, it leads to disaster. These policies destabilize the private sector to such an extent that they actually jeopardize chances of any future recovery. Many Greek citizens felt that they had reached this threshold and wanted a reversal of policy.

LP: Tsipras has promised to reverse some tax hikes and cuts to social services, but Greece is still in the Eurozone. Because, as you mention, it doesn’t have control of its own currency, the Greeks will have to negotiate with the so-called Troika of the European Union, IMF, and the European Central Bank. Do you think there is a possibility for meaningful changes given this challenge? And how might internal Greek political problems, especially with Tsipras’ possible coalition partners, affect the situation?

MS: This is the “million euro” question: how can the Greek state invest in its economy while still remaining in the Eurozone?  Syriza faces a huge challenge politically since the pro-austerity parties in Greece, i.e. New Democracy, LAOS, PASOK, Democratic Left, KIDISO, and POTAMI, still constitute a fairly large block of the vote and the majority of the electorate would seemingly still prefer to remain in the Eurozone.  Since it doesn’t have a mandate to take Greece out of the Eurozone, what other options are available?

We have seen already how Germany has warned the new Greek government that it must live up to commitments to its creditors, and with Greece’s current bailout program ending in February it will have little breathing room. There may well be a willingness to give the Greek government more time to make its debt payments, but the present Troika seems rather uninterested in outright debt cancellation, even if there may be some desire to negotiate some smaller changes, like the creation of a distinct Eurozone-wide public investment fund which might do things like build and repair roads or support clean energy projects and generate sufficient overall growth, especially in the rest of Eurozone, to perhaps spill over into Greece and turn around its current account balance and also raise government revenues.

All of this means negotiations with many partners that will take time for the present coalition government. On the other hand, the Greeks could get some short-term relief with the depreciating euro in terms of increased net exports for all countries of the Eurozone. Also in the short term, there is the European Central Bank’s commitment to do quantitative easing, or pumping new money into the economy. I have argued that quantitative easing doesn’t work to stimulate private sector spending, but it might help backstop what would have been an eventual financial collapse of a number of Eurozone countries. A lot depends on how big the European Central Bank is willing to go with its plans. If the action was bold enough, Greek banks could benefit indirectly and it could give the Greek government some breathing room and prevent a default, assuming its current creditors demand payment. In the medium term, Greece could create some form of parallel currency set at par with the euro, like Argentina did in the early 2000s. The government in Argentina used “patacones” to buy things and pay employees and they became quite acceptable because ultimately regular people could pay taxes with this currency. The Greeks could have a parallel national currency without altogether abandoning the euro.

So these various short-to-medium-term measures may well be available to prevent default, but, at the end, if the Greek government cannot renegotiate its crushing debt burden — without some form of debt forgiveness in however form it will be disguised — you could see a Greek default happen. If it reaches that point, I don’t think there’s anything in the Eurozone treaties that would prevent Greece from retaining the euro. In this case, it will have to learn from the experiences of dollarized countries such as Ecuador that have been surviving under very severe constraints on fiscal policy but without the oil revenues that until recent times have served well to replenish Ecuador’s coffers.

LP: Lots of countries, like Italy, Spain, Portugal, and maybe even France, are getting close to the distressed economic conditions of Greece. How will a Syriza government in Greece impact them? How do you think those governments will relate to Germany after the election?

MS: I believe that this will give a huge boost to those anti-austerity parties, especially in southern Europe, that are in a similar situation to Greece. That’s going to put further pressure on Germany to accommodate. But it will also boost the support of the nationalist right-wing anti-euro parties, as in France. If all these parties manage to achieve power, it may well be either that the Eurozone countries establish ways for countries to have more latitude in taking action to stabilize their economies.

If some of the right-wing parties come to power, such as the National Front in France, it will mean the end of the euro. The withdrawal of a core country such as France from the Eurozone could lead to currency realignments at the regional levels, without any chances for the survival of the entire Euro bloc.

LP: Do you think there are lessons in what has happened in the Eurozone for students of economics and the way the subject is taught?

MS: Yes, indeed. Ever since the establishment of the modern nation-state in the late eighteenth and nineteenth centuries, the creation of the euro was perhaps the first significant experiment in modern times in which there was an attempt to separate money from the state, that is, to denationalize currency, as some right-wing ideologues and founders of modern neoliberalism, such as Friedrich von Hayek, had defended. What the Eurozone crisis teaches is that this perception of how the monetary system works is quite wrong, because, in times of crisis, the democratic state must be able to spend money in order to meet its obligations to its citizens. The denationalization or “supra-nationalization” of money with the establishment that happened in the Eurozone took away from elected national governments the capacity to meaningfully manage their economies. Unless governments in the Eurozone are able to renegotiate a significant control and access money from their own central banks, the system will be continually plagued with crisis and will probably collapse in the longer term.

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  1. Jim Haygood

    ‘The government in Argentina used “patacones” to buy things … the Greeks could have a parallel national currency without altogether abandoning the euro.’

    Not according to the ECB:

    In accordance with Article 106(1) of this Treaty, the Governing Council shall have the exclusive right to authorize the issue of banknotes within the Community. The ECB and the national central banks may issue such notes. The banknotes issued by the ECB and the national central banks shall be the only such notes to have the status of legal tender within the Community.

    If such notes were possible, Papandreou would already have issued them as pasokones.

      1. alex morfesis

        let us not confuse “legal tender” with other types of debt discharge instruments

        it is true the format as described above from Chapter 3 article 16 gives to the funbunnies brought to us by the former electors in Regensburg, the power of official Legal Tender…that is any instrument created by the official money handlers MUST be accepted,


        just like the swiss have their WIR system, any party can create their own NON legal tender…

        “…In the euro area, Article 128 (1) TFEU lays down the legal tender status of euro banknotes, and Article 11 of Regulation EC/974/98 on the introduction of the euro does accordingly with regard to euro coins. This mean that in the absence of an agreement of the means of payment, the creditor of a payment obligation is obliged to accept a payment made in euro which subsequently discharges the debtor from his payment obligation.
        Yet, contractual parties are free to agree to use in transactions other official foreign currencies with legal tender status in the state of issuance, e.g. the Pound Sterling or the US Dollar. The same applies to privately issued money like local exchange trading systems (e.g. voucher-based payment systems in certain communities) or virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them as private money and without prejudice to the official currency (euro or national currency) being the sole legal tender. In that way, these forms of private money can be considered as economic assets. Private money transactions and business related to them are subject to the general rules of commodity trade such as taxation law, business law, anti-money laundering law or others. However, they are not official currencies and they are not governed by monetary law….”

  2. DJG

    This article by Greg Palast dovetails with what Parramore and Seccareccia say above. In particular, reforms and economic growth can’t take hold within the euro:
    As I continue to re-read Hannah Arendt’s Human Condition, I’m extending an idea that she insists on: That the beginnings of modern capitalism were funded by expropriating church lands during the Reformation. (Older styles of capitalism, like the Venetian Arsenale, with its industrialized building of ships, were already in place, so capitalism wasn’t exactly a new idea.) Arendt assumes a second wave of expropriation, of the peasantry and its property, resulting in the destruction of traditional ways of life–countering all of these arguments that the Church and the peasants celebrated too many feast days, which, she remarks, wasn’t such a bad thing. So is this a third wave of expropriation, as late-state capitalism grows increasingly decadent? Greece as appetizer, Spain as primo piatto, Italy as main course?

  3. Doug Terpstra

    “… no major cracks appeared until the end of 2009 when the financial markets got spooked because the Greek authorities were found hiding Greek sovereign debt with the aid of advisors of financial institutions.”

    And those advisors would be —drumroll— none other than Goldman Sachs, purportedly “doing God’s work”, which apparently entails committing massive fraud for short term profit. At least that’s the simplistic narrative. An equally plausible, more sinister scenario is deliberate entrapment via predatory Shock Doctrine terrorism, which now has Greece in vice. That’s more plausible really, given that EU officials must have known the real score and that Goldman has never been seriously called to account, either in the courts or the media, for what can only be defined as deliberate fraud. I suspect this is part of the strategy toward full-spectrum dominance and one-world governance.

    1. Marko

      “….An equally plausible, more sinister scenario is deliberate entrapment via predatory Shock Doctrine terrorism…”

      I’d say “more plausible” , but that would put me in the nutter conspiracy camp , since I can’t back that up with specific evidence.

      I’ll also refrain from claiming that the recent successful lobbying by the big investment banks to ensure that their derivative exposures retained gov’t bailout protection provides a grim foreboding of a coming derivatives catastrophe. Along the same lines , I’ll not speculate that the exact timing of such catastrophe , should it occur in the next few years , is likely to be based on the events leading up to the 2016 election. Political events , that is.

      Nope , I’m staying away from such talk. It’s bad for my self esteem when people call me a nutter.

    2. participant-observer-observed

      Oligarchy cat fighting blocks >> clash of the titans, Goldman Sachs style (w/ Kochs hovering in the background?)

      (which btw are jealous asura gods in traditional Vedic & Buddhist cosmic mytho-models and not enlightened at all!)

      Great to see the notion of “process of democracy” enter the discussion and Greece should more strongly play its democracy card in terms of cultural heirarchy over Attila and his ilk!

      With all of those island chalets and yacht docks, Greece has a strong hand to play with the oligarchs here, it would seem. Less France, Spain, and Italy, where are the oligarchs going to park their yacths, Lebanon and Israel and Libya?

  4. dejavuagain

    Greece has so many internal structural/social issues but so many resources – the latter being its climate, its scenery, its history, its wine and cheese and fish and its industrious educated young (until they become cynical). Greece is full of non-functioning institutions including the courts and the unfortunate economic impact of the church – the latter being a factor no one is supposed to mention.
    The courts have educated judges, but archaic procedures and are incredibly ineffective. Until the grip of the 1% is broken in Greece and the grip of the church is broken, I do not see a great future.

    My idealistic solution is (1) to retire everyone over 40 and let the educated youth take over and (2) to remove all symbols of the church from government institutions and (3) to tax all contributions of property to the church (the church is part of the 1%.) Also, the property of all forests that are burned to the ground should be undevelopable except to regrow forests or for agriculture. No relative of a governmental official may be hired by any government agency. All no-show governmental workers should be required to repay twice their salaries to the government and lose their pensions.

    I guess this is all not practical, but one can only dream. So, even if Greece does not repay its loans, it will be back in the same difficulties unless the problems are addressed. Perhaps debt write-off could be coupled with addressing structural issues as demonstrated by facts.

  5. craazyman

    Notes on a Mental Disorder

    You can count it but you can’t see it, unless you write it on something you can count and see. Then it’s two things, what it is and where it’s depicted. But the second thing isn’t it, it’s only a graven image, or in the case of coins an engraved image. Sometimes it really is an engraved image. It has been for thousands of years, stern visages, strong jaws, curly hair stare into nowhere with an air of expectant authority buried in sweaty palms stuffed into pockets and drawers lost on a street and lost finally to time. The Hebrews would not allow God to be depicted, nor do the Muslims. The Christians found depiction festive and cultivated it in the arts. But even they never mistook the image for the reality. It was always and ever only a metaphor that functioned as a catalyst for the higher and purer thoughts of the spiritual reality that allegedly lies always just beyond the edge of this one. Right now the ECB is set to grow it’s balance sheet to $2 trillion. Right now the Eurozone money supply, M2, is nearly $10 trillion. Greece’s debt mountain, a Parnassus of corruption, a monument to wanton unbridled Dionysian debauchery, a labyrinth of analytical dyspepsia, a monadnock of misanthropic malefaction, a carnival of carnal and craven cunning, a knot of lies and deception, can be measured by altimeters to rise to a height of approximately $350 billion (I’m not sure if that’s dollars or euros but who cares? It doesn’t matter). It could be entirely eliminated with a single keyboard stroke, and in the vacuum thus created, a tiny air pocket in the monetary fabric of Europe, another $350 billion of “new” money could be gingerly inserted as a form of plastic surgery, a little nip and tuck with some of whatever that shlt is they inject into eyebrows and cheeks, I can’t remember the name of it. And then they could start over wtih lessons learned — at least until they forgot them again. But that is something that would be seen as a catastrophe — even though the new money would do exactly the same thing as the old money, in the same way, at the same time, with the same potency and with the same result. Mathematically, the two “monies” would be indistinguishable from one another. In fact, they would be virtual equalities. And yet, this would destroy Europe. One wonders what slender foundation underlies a system so fragile. One doesn’t have to wonder for very long. it’s right there in front of you, every day, in every face — or almost every face — you see. Especially the faces on the news. Especially those faces. You can count things and you can know things and sometimes you can know that the things you know can’t all be counted. But sometimes you can’t. It’s hard to know why that is. So sometimes you just try to forget about it.

      1. craazyman

        what a sychronicity. I just got sick of reading a math book and lo and behold, surfed in here and you just posted a comment minutes ago.

        Faaak. Of all people you should get this. I’m surprised it took you 2 days — that’s not real sharp of you. Were you drinking? I was and had a headache this morning.

        Of course, if they do it for Greece then everybody would want a “freebie” too. OK, give it to them. What would happen? That takes some imagination, but frankly it wouldn’t be what people think would happen. People think an asteroid would hit and everything would explode. But what would happen instead is everything would get quiet and still, like right before a Bigfoot comes out of the woods, and then the Bigfoot does come and stares at you and you say in your mind “Oh my God! Oh My God! ” Then he walk back in the woods and you just stand there not knowing what the hell the universe is made of. Your entire idea of the worlld has just crashed but everything is just like it was before, absollutely nothing has changed, but everything has changed. How can that be? What do you do now? I’d go out for a beer, personally, and try to relax. If you can postpone the hard work until tomorrow, that’s what I’d do.

        1. participant-observer-observed

          “What would happen? That takes some imagination, but frankly it wouldn’t be what people think would happen.”

          Birth of another slew of Martin Luthers nailing scraps of paper on doors?

      1. Rosario

        Yep, there is a great deal to dislike about him. He was an opinionated, comfortable, and inflexible aristocrat that let the Soviet Union bleed while he tried to protect his dying empire. The “Soft Underbelly of Europe” what horse s**t. Had he pushed to invade the western front of Europe earlier in the war soon after America became involved (as many wished he had) he would have easily (as compared to D-Day) punched through the western beach heads and potentially ended the war two years earlier. The Atlantic Wall was anything but until Rommel solidified it in 1944 and the British government knew this. All that aside, the whole war could have been avoided about a decade before it started if it weren’t for ideologically inflexible oafs like Churchill. Sorry, got carried away, but yes I think Churchill was an asshat.

  6. cassiodorus

    So we are repeatedly told that the Greek public wants to stay in the Eurozone. At what cost? Are there opinion polls asking the public if it would give up any hope of an income in this lifetime as the cost of staying in the Eurozone?

  7. Kurt Sperry

    How willing are the Northern EZ countries to bargain faced with any real possibility of the whole project failing?

  8. Farnorth6

    So here we are at the point of examining how the credit system actually works for Federal governments.
    Firstly, everyone adopts a single budget,including both operating costs and capital projects.and for some reason people think the capital projects should not be financed (The govt should never run a deficit budget and finance the capital projects with the issuance of bond debt.)

    What a joke. Each Federal Govt by law and tradition only budgets an interest payment each year. No Principal. So what we learn is that the National Debt is actually a revolving line of each case and for every Federal Govt ,except those who have a long history of positive trade balances ,follow the standard 30/60/90 Debt to GDP rule Every Federal Finance Ministry staff have had the job for the last 600 years of ensuring each year when there is an adopted deficit budget adopted by the politicians,
    of selling a new bond issue sufficient in size to add monies to the bank account in use so that the cheques do not bounce. Now whats hard about that.!!! Its also the case when a bond comes due for redemption of principal ,,a new bond of similar value is also sold to raise the cash to cut cheques or make electronic transfers to pay off the original principal. At the end of the day,under this system it is necessary
    for every govt to run a small deficit equivalent to the GDP increase of the country involved
    to finance capital expenditures and keep up with the private sector generated increases.
    A surplus may sound good but beyond a certain point destroys the infrastructure of the country and
    makes the private sector more not supplying the needed infrastructure (Think school and hospital construction). At the end of the day if a country has become too in debt the secret is to run a surplus when the country is not in recession(eg when the growth is 4% plus). Anything else is make believe.

  9. Farnorth6

    In my view the position put forward by the Professor is mathematically correct ,as is also seen by Professor
    Steve Keens work.. It is always interesting to look at how the Debt got to this level. For some reason the Globe and Mail of Canada had an excellent article after the Greek Summer Games showing how the Greek
    Debt to GDP ratio went from 80 % to 120% . A project not affordable by such a small country..\

    Since that time,Military hardware was purchased from Germany and others running it up to 120 %of GDP.
    No wonder the Greek public are upset On paper, they were taken from a second world country to a third world country, just by those two Federal Govt decisions.
    At the end of the day Michael Hudsons observations apply Debts that cant be paid wont be.paid. No matter what nonsense happens at the IMF, ECB etc.over the next few years,trying to beat down the new Greek govt with more debt,. instead of less..

  10. EoinW

    von Hayek a modern neoliberal? Excuse my ignorance on economics but that almost sounds like blaming Nietszche for the nazis. Perhaps the issue is: what is a neoliberal? To my understanding, in theory a neoliberal supports the free market. Yet these modern neoliberals love nothing more than to use governments to manipulate the economy. Austerity to them is making lots of cuts at the bottom but retaining, even increasing, the authority of the central government. That is, increasing its right to intervene in the “free” market on their behalf. Simultaneously, central governments are made subservient to multi-national corporations. What I’d call Cartel Capitalism.

    Not sure why all this must be blamed on von Hayek. Instead of modern neoliberals why not call them what they really are: neofascists.

    Finally, I disagree with this conclusion that in times of crisis democratic governments(or any government) must be able to spend to fix the problem. If the crisis is due to too much debt and credit then it makes no sense that more debt and credit will fix the problem. I know the argument against QE is that the money isn’t making it into the real economy. However the assumption is that if it had been given directly to the 99% of citizens then the crisis would be solved. That’s simply unproven. Plus if the crisis is due to people living beyond their means and spending money they don’t have then it makes no sense that giving them more money created out of thin air will solve the crisis.

    I think it fair to suggest that every economic crisis of the past 100 years has been created by central governments. From WW1 to 2008 their actions have brought on each crisis. Are we really suppose to believe they are to be trusted with fixing the current problem given they created the problem in the first place?

  11. Moneta

    We know that austerity does not work. But what are we supposed to do… give the defaulter even more money so they can keep on spending the way that led them to the default?

    That is why austerity has such a foothold. It’s because the alternative creates new problems. All the real solutions require sacrifice from some group and a long-term outlook. And nearly all the ones making the decisions are rich and over 50.

    Humanity is like a Ming Dynasty vase…. it should have been safeguarded decades ago. We keep on dropping it. Everyone keeps on getting angry because it takes too long to put all the pieces back together again. And once the puzzle is finished, everyone is appalled at the fact the glue and the cracks still show.

    Ironically, we could just create and venerate a brand new one.

    1. Calgacus

      But what are we supposed to do… give the defaulter even more money so they can keep on spending the way that led them to the default?
      Yes, of course. Up to the point of inflation/full employment. And not “give” the money – Syriza criticized the way Greece was “given” money. Spend money in a sane way, the way every nation spends within its own borders -e.g. central fiscal spending for unified pension / welfare schemes, for full employment (on the periphery). This is not a “gift” from the center/Germany to the periphery/Greece, but a free exchange, which is being interfered with by the center’s irrationality. Yes this is “fiscal” but it is not “transfer”; it is not “redistribution”; nobody needs to “sacrifice”. “Transfer” & “redistribution” & “sacrifice” all presuppose full employment, a mental model, a zero-sum game where employment is always full, where there are no free lunches, no low-hanging fruit – and no money, no value to money. In reality, all the center has to do is allow the periphery to support itself (within the Euro system).

      The truer, realer “default” is the current Euro system, which cannot work. Basically, it is a government that taxes and refuses to spend. People can’t pay tax money that they can’t acquire because it hasn’t been spent into existence / printed yet. If you work for the government with a salary of $10,000 dollars, and the gov says that makes you owe a tax of $20,000 “or else” : you get the “or else” because the government has defaulted on its obligation to have sane laws. The Euro system itself is a Big Lie. So big that people cannot see it is a lie because they cannot believe that anyone can say or do something that untrue and stupid.

      It’s because the alternative creates new problems. All the real solutions require sacrifice from some group and a long-term outlook.
      Nope. The real solutions don’t require sacrifice, but accounting. They are a win-win. That is the tragedy of it. Or the farce. There are no problems to speak of with the alternative, the real solution. Unfortunately (neo)classical/commodity theory/automatic full employment thinking is incredibly strongly inculcated. The true long term outlook is understanding that the short term always comes before the long term. You don’t make yourself better off in the long term by blowing your – or your neighbor’s – brains out in the short term.

  12. Moneta

    Ironically, we could just create and venerate a brand new one.
    But who will supply the materials, the labor and who will get to keep it and admire it?

  13. Sam Kanu

    If some of the right-wing parties come to power, such as the National Front in France, it will mean the end of the euro.

    Sorry, but this is just not true at all. The French benefit from the Euro. Can you imagine the wreck that the French Franc would be if it was revived.

    You must understand first and foremen that the so-called “far right” or “populist” parties in Europe are not economic liberalists, nor are they stupid. What they do is they use economic dissatisfaction and “cultural” warfare as an agenda for promoting xenophobic ideas and strife. That is ALL.

    You can just look in Norway for example where one of these so called “far right” parties (the FrP) is actually IN POWER in a coalition government in which they have like 40 percent of the cabinet posts. The only thing that party has done in their entire campaign platform is to implement trivialities such as permitting professional boxing and Segways (yes if you are wondering how trifling they are, that was on their manifesto). Oh and now you can build a shed in your garden without getting planning permission.

    But things like taxation? Well what the FrP actually did was cut taxes for the 1% while increasing costs and fees and hidden taxes on the 99%.

    Cutting ties to Europe – no the FrP is only pushing harder to implement neoliberal European policies such as increasing the ability of employers to build a class of permanent “temp” workers and so on.

    This is what you have to grasp about the European right – they are not! They are hugely dangerous racists, that are waltzing in to respectability while the media goes on parroting nonsense about them being separatists. It’s quite the opposite. – they just want a grip on power, and they DONT A HAPPY SERVING WITH THE 1% T DO IT. Yes, the same 1% who want the Euro and austerity.

    So no, the Euro isn’t going anyway. All of you in the media and blogosphere must
    – stop repeating this misleading line
    – stop confusing the neo-fascists with actual right wing parties as we know them. These are wolves in sheeps clothing. And if it ends in bloodshed, that will be what they want in fact. They are spoiling for it.

    I have to draw 1930s parallels but Europe is sleepwalking into a repeat. And the media (blogosphere included) will be at least partly to blame because they are doing a horrible job of informing the public about what these “protest” parties are about

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