Thanks for visiting this blog, created in July 2012 out of great concern for the fate of the €uro currency area, once again on the verge of collapse due to the economically ill-advised and heartless austerity policies imposed on Greece, Spain and other heavily-indebted €uro area countries by a christian democratic German chancellor impressed with the budgeting skills of Schwabian housewives. Meant to reduce the public debt and put the countries back on a path to economic growth, these macro-economically idiotic policies are doing anything but cause "pointless misery" as Paul Krugman so aptly describes it (Bloomberg, July 23-29, 2012).

Instead of reducing public debt, the austerity measures set in motion a vicious cycle of economic contraction, rising unemployment and poverty, lower tax revenues, private capital flight, and rising public debt shares as the economy declines faster than the public debt. What’s more, the austerity-driven ‘blood, sweat and tears’ policies recommended to the European periphery derive from the same economic doctrine that brought us to the brink of disaster in 2008. These policies are not only misanthropic and counterproductive to economic growth and debt reduction in Europe, but will prove explosive for the €uro currency area unless a drastic change of course takes place - and soon.

While I do not pretend to have ‘the’ solution for the €uro crisis, I would like to offer alternative economic perspectives and views on current events, and hope to chart a more humane path toward a balanced, socially fair, and sustainable economic future for the €uro area.

On the origins of the 2008 Great Financial Crisis:
“90+% of traders are men, and they bet all of our bank deposits on liar loans which froze credit leading to 40% average losses passed on to ordinary taxpayers; then begged for trillion-dollar bailouts upon which they paid themselves 50% higher boni.”


Sunday, June 16, 2013

The European Parliament: sole custodian of democracy and social justice in Europe ?

There are rays of light in the sorry state of economic and political affairs in Europe. The question is whether these rays of light are the glaring lights of a fast approaching train or the soft lights of a new morning dawning in Europe. Let's hope it's the latter.

On May 23, the European parliament passed a resolution demanding more democratic accountability on economic reforms in general and decisions regarding reforms and policy measures under the planned 'Instrument for Convergence and Competitiveness' in particular. After the successful vote, Green economic affairs spokesperson Sven Giegold correctly stated:

"Decisions about the economic future of Europe should not be taken by a handful of representatives from national governments and EU officials behind closed doors. There is a need to ensure much greater democratic accountability of any further moves towards economic union. The Commission and Council cannot continue to by-pass democracy through arcane pacts and intergovernmental agreements." [such as Merkel's new baby, 'Convergence and Competitiveness' pact - note by the blog host].

Sven Giegold continued:

“Any EU-level coordination of national reforms and economic policies must be subject to scrutiny and approval by democratically-elected parliaments and any legal framework with that purpose needs to be adopted under co-decision. Greater involvement of social partners in reforms will also bring more transparency and acceptance of these policies and the EP has today made these points. MEPs also called on the Commission to ensure sustainable development and social investments are not neglected and are rather at the core of its focus."  Amen !

Seven days later, Madame la Chancellière Merkel and President Hollande met and made a number of bi-lateral decisions without the annoying influence of other eurozone members and the European Parliament. These decisions, as published at length in a press notice of the German information office, include President Hollande's wish to promote economic growth and allow each country to decide on the speed of fiscal consolidation. It also includes, of course, Merkel's obsessions: the continuation of 'growth-friendly' fiscal consolidation and the 'boosting' of competitiveness, competitiveness, and competitiveness some more.

That blew the kettle in the European Parliament. On June 10, an alliance of all major EP party leaders and a broad majority of EP deputies motioned for a resolution to strengthen European democracy, strongly rejecting the back-door policies of national leaders: ..."reminds the European Council that it does not have any Treaty-based prerogative of legislative initiative and that it must stop instructing the Commission on the form and/or content of any further legislative initiative..."  "...Reiterates that it cannot accept any further intergovernmental elements in relation to the EMU and that it will take all necessary and appropriate action within its prerogatives if such warnings are not heeded;...." "....Recalls that EU participation in the 'troika' system should be subject to democratic scrutiny by, and accountability to, Parliament;..."

Need I say more?  It was high time the elected representatives of the European people put their feet down  to stop the undemocratic decision making of national leaders and unelected technocrats.
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