Wednesday, July 1, 2015

July 1 2015. Better Europe now than the way it was—by far.




The U.S. media have been forecasting the imminent demise of the EU—or at least its sinking into ineffectiveness and decline—for virtually as long as there has been an EU.

As for the Eurozone, articles about have been downright vitriolic.

Meanwhile, the EU has steadily expanded—and has largely prospered. Concurrently, the U.S. has declined in numerous ways to the point where the income of most Americans—when inflation is factored in—is dropping.

The U.S. remains the strongest military power in the world—although it is singularly unsuccessful at winning its wars—but under a host of other headings, from health to education, continues to lose ground.

I don’t know enough of the background to, and details of,  Greece’s plight to have formed a firm view of the matter—though I will hazard a few observations.

  • Greece’s recent history is worth studying. It was ravaged by both Italy and Germany during WW II, endured a bitter civil war afterwards, and has suffered from periods of dictatorship since. In short, though it has a lousy system of governance, there are historical reasons for it.
  • Greece was never adequately compensated for what it suffered in WW II. Both Italy and Greece still owe it substantial compensation.
  • The U.S. has contributed to Greece’s plight in at least two ways. (1) Firstly, it supported the dictatorship that ran Greece so disastrously for some years. (2) Secondly, U.S. banks contributed significantly to Greece’s financial plight.
  • Austerity alone is no way to revive an economy. It has already cost Greece 25% of its GDP over six years and it seems highly probable, unless a new strategy is used, that the Greeks face another six years of misery.
  • The EU is not handling this well. It needs to adopt a carrot and stick approach. As matters stand, it is all stick. The stick needs to be retained, because the Greek system of economic governance really does need serious reform, but a substantial stimulus mechanism is required as well. Could both co-exist? I see no reason why not.
  • Greece’s lenders are very far from innocent.
  • I don’t see any way that Greece can pay off its debts.
  • It is not in the EU’s interests to have a near permanently crippled Greece as a member—nor to drive it out. Here, I differentiate between the EU and the Eurozone.
  • We all need to take a long, hard look at financialization and its implications.

The U.S. system is neat, understandable—and has been hijacked by the ultra-rich and their corporate interests.

Europe is a somewhat confusing mess which works surprisingly well. It sways and stumbles, but seems to get there in the end.

I have to wonder which system is best suited to the human condition.


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