debating progressive politics in Europe and beyond
The fiscal austerity doctrine – henceforth FAD – emerged in full force in the Euro area in the first half of 2010. By then, apprehensions of a sovereign debt crisis that have been brewing since the last quarter of 2009 became a harsh reality in the case of Greece. The Greek government signed a bail-out [...]
Paul Krugman recently shared a graphic from Eurostat that shows just how bad the employment situation is in Europe on the whole. Of course, the situation is much worse on the periphery. The graph below shows the evolution of employment in the southern periphery in general (Italy, Spain, Greece, and Portugal) and Spain and Greece in specific during the [...]
There is a lot of confusion about the fiscal implications of the government bond-buying programme – the OMT, or Outright Monetary Transactions – that the ECB announced last year. This confusion arises mainly because the principles that guide the solvency of private companies (including banks) are applied to central banks. The level of confusion is [...]
Concern has frequently been expressed that the deep and ongoing economic crisis in Europe, especially in the so-called periphery, could lead to a rise of political extremism. Reference is often made to the inter-war experience of Germany where the mass unemployment created by the Great Depression and the inability of democratic parties to deal with [...]
Maybe that title is too strong, but there is an arguable case that what happened to Greece in 2010 was crucial in the move to austerity not just in the Eurozone, but in the UK and US too. As most reasonable people now recognise that the global move to austerity was a terrible mistake, understanding [...]
It seems that austerity is out of fashion in the eurozone – at least for the moment. The European Commission has given Spain, France, and the Netherlands more time to comply with the European Union’s 3%-of-GDP deficit ceiling. Even German government officials now concede that something more than fiscal belt-tightening is needed to revive the [...]
This morning I was back on CNBC Squawk Box Europe to discuss the ECB’s Outright Monetary Transaction (OMT) and the current hearings at the German constitutional court. Interesting discussion early in the morning with references to psychology and golden retrievers (as used in the brilliant movie Margin Call)…
Did you think that the policy of fighting recession by increasing austerity was now intellectually bankrupt? No one seems to have told the Dutch central bank. (Hence the deliberately provocative title of this post.) The latest forecast by the Bank says: The economy will shrink by 0.8% this year, followed by growth of 0.5% next, ‘accelerating’ [...]
The objective of ensuring ‘proper social protection’ is enshrined in the European Treaty but it is not a direct objective but a derived objective that is based on the idea that it will be achieved only as a consequence of implementing a sound economic policy. The Euro crisis has shown that this theoretical construction has [...]
Wages are not the cause of the crisis, nor a tool to overcome it. But wage coordination is needed as an essential element of a Social Europe. Wages as a problem ? According to the mainstream analysis, excessive wage growth is the cause of imbalances within the Euro area. Yet there was a fall in [...]
Tow days ago I was back on CCTV America‘s ‘Biz Aisa America’ programme to discuss the trade issues between the EU and China that have recently flared up and the latest Eurozone GDP figures. And yes, we talked about austerity too; and I will continue to do so until some real policy change is coming. [...]
The high unemployment that we have today in Europe, the United States, and elsewhere is a tragedy, not just because of the aggregate output loss that it entails, but also because of the personal and emotional cost to the unemployed of not being a part of working society. Austerity, according to some of its promoters, [...]
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