29 June 2011

European resistance

Things are heating up on the Old Continent.

In Greece, the legislature today flung down the gauntlet to the people by enacting yet another devastating austerity package which the European Union authorities had demanded of it as the condition of yet another "bail-out" -- actually loans to enable Greece to pay back earlier loans, sucking it ever deeper into the debt quagmire. Even before the vote, a 48-hour general strike had been declared, with mass-scale participation, and violence had broken out. After the vote, renewed fighting erupted in Syntagma Square and lasted for hours. "The detritus of battle lay everywhere with burning barricades, smashed pavements, shattered masonry, looted shops and destroyed kiosks." The Greeks, having seen their own "leaders" side with the EU against them, must now realize that they have no one to depend on but themselves -- and they seem in no mood to quietly accept the destruction of what remains of their economy for the sake of fixing a deficit created by a system which for decades allowed the wealthy to evade taxes.

In Britain, public-sector unions have called a general strike to protest attacks on their pensions. It's unclear how many workers will participate or how much public support they have. But with widespread cuts threatening an economy already suffering high unemployment, and with a massive anti-austerity protest having swept London just three months ago, the ground would seem fertile for a broader eruption of resistance. Britain is not part of the euro currency zone, and the austerity policies are the work of its own government, not imposed by the EU -- but for that very reason, there's more basis for hope that massive local opposition can bring change.

People in other nations will be watching. Spain, Portugal, and Ireland are all in a somewhat similar position to Greece -- their economies already in recession, with matters getting steadily worse due to austerity measures imposed by the EU as the price of new loans to pay the old -- though none has yet reached the same depths of anger and despair. Spain and Portugal have already seen large-scale protests against their leaders' spinelessness in the face of market forces and the EU oligarchy. In March, demonstrators rallied in Brussels, the EU capital city. Even in prosperous and dynamic Germany, taxpayers have long been furious at the cost of the endless bail-outs of the weaker states. Everyone knows that if Greece and other countries in similar straits were to abandon the euro currency, they could very quickly improve their economic competitiveness by devaluation, and set their own spending policies prioritizing jobs above deficit reduction. But that might also lead to the break-up of the whole common currency zone -- something the oligarchy is determined to prevent.

It could be an interesting summer in Europe.


Blogger Ahab said...

In the event that the Euro currency zone does break up, what economic impact to you see it having for the rest of the world?

29 June, 2011 20:11  
Blogger Infidel753 said...

That's a complex question and I'm no economist, but briefly, I'd guess that:

1) The various stock markets would go up and down, as they're always doing in response to something or other.

2) Countries that have been keeping euros as hard currency reserves, or investing in the euro in whatever way, would take a hit.

3) Investors would stampede back to the stability of the dollar, driving it up in value (bad for US competitiveness) but also lowering US government costs of borrowing (good for coping with the deficit).

4) Most significant effect: in the long term, Europe would be back on the road to sustainable prosperity, which would be good for the rest of the world, including us.

30 June, 2011 05:32  
Blogger Robert the Skeptic said...

Greece only needs to look at it's own history to know they are not immune from societal collapse.

01 July, 2011 18:21  
Blogger Ranch Chimp said...

Mornin Infodell ... Interesting post, at least for me, I dont know if folk's actually see what's goin on, but I wrote plenty about it, so not going to push it. Austerity? ... heh, heh, heh, heh, heh ... that's not what I been calling it ... they can call it what they want as far as title's ... but I'll leave it there. Thanx for the posting ....

02 July, 2011 06:01  
Blogger Infidel753 said...

RtS: At least in the old days they didn't have the EU to worry about.

RC: Austerity is a rather bland, "austere" word, isn't it? These policies are more like the economic equivalent of what Catholic priests do to little kids.

02 July, 2011 06:35  
Blogger Ranch Chimp said...

Heh, heh, heh, heh, heh ... more equivalent to what priest's do to the altar boyz, I think that's more accurate, heh, heh, heh, heh, heh ... you know Guy ... they could have their fist's elbow deep in our asses and they would call it an security measure ... :)

Ahhh shit ... wish I didnt have to go to work today either! :(

02 July, 2011 07:06  

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