In May 2012, Marco d’Eramo wrote:
It is plain to all: monetary union is dividing Europe. The divide is political, social, economic in particular. The euro was designed as a tool to cement European political union and to anchor German prosperity to the rest the Continent. Instead, it has served to highlight the gap between town and country, led to economic collapse and exacerbated nationalism and xenophobia. A collateral by product, but no less devastating, is that the euro is undermining democracy, thwarting universal suffrage, cancelling two centuries of popular gains, erasing with a stroke of the pen essential elements of civilization. (1)
Professor Bill Mitchell, prominent heterodox MMT economist, explains in his 30 minute lecture, that the underlying problems with the structure and neoliberal assumptions of the Eurozone, made the Eurocrisis resulting from the Balance Sheet recession caused by the financial sector, inevitable. There are really only two options for recovery – a full federal system or a return to currency sovereignty.
Professor Bill Mitchell on the Eurocrisis, May 1, 2012
Bill Mitchell gave this presentation in Melbourne at an event hosted by the Monash University European Union Centre.
Professor Bill Mitchell concludes that a full federal system has little support in the populations of Eurozone countries and recommends an orderly return to sovereign currencies, but as we have seen in the past year, let alone days, that seems unlikely. Some argue that a crisis will be staved off by fudging until after the German national elections. Others think that the unacceptable terms of the Cypriot bank bailout suggests that there is a growing sense here that Germany is up to something big, perhaps even a decision to get the hell out of the euro. (2)
However, there is no doubt that there has been, and certainly still is, a large degree of brinkmanship (3). The ‘shock doctrine’ of the Greek ‘experiment’ has been used across the EZ to justify austerity policies and to frighten the electorates into accepting fiscal integration.
‘This structure will ensure the austerity mindset, firmly in place among global capitalists, will dominate and spread across all of Europe. This mindset will be hard-wired into the rules and regulations…. Not only will democracy be diminished, the result could be catastrophic for peace within Europe itself.’ (4)
What will happen now? There is no doubt that the Eurocrisis will not go away until the contradictions upon which the EZ was conceived are resolved .. and there is no doubt that the undemocratic behaviour of the Troika (EU, ECB and IMF) has been ruthless, as Michael Burke explains with regard to Cyprus, in his Guardian article:
The raid has been instructed by the “Troika” – the European commission, the IMF and the European Central Bank – as part of a characteristic “take it or leave it” ultimatum to the Cypriot government. …
However, he concludes .. it is foolish of the Troika to assume that its confiscation of Cypriot savings will have no international implications. Savers all across Europe will look on in horror, and are bound to wonder whether it could happen in their own countries. It is entirely possible they will respond by shifting their savings into state or postal savings banks at the very least, even if outright bank runs are avoided. If this happens on sufficient scale, it could further undermine the fragile banking system in a number of countries.(5)
That popular resistance is also growing is evidenced by the European anti-austerity movements, the demonstrations, national strikes and the electoral success of the Grillinis in Italy. Political polarisation is occurring with a frightening rise in extreme right wing/fascist parties.
What a disastrous mess with devastating consequences for ordinary people, particularly the young … and for what? The accumulation of more and more wealth into the hands of the extremely few. Its back to the future Neofeudalism.