Greek people is under occupation.
Merkel Germany, EC, ECB and IMF try to kill the Greek people by force them in internal default. In order to doing this, they kill the Liberal Democracy. As Pr. Krugman remark: "They now looking at a scenario in which Greece is forced into killing levels of austerity to pay its foreign creditors, with no real light at the end of the tunnel.
This is just not going to work."
Wednesday, May 09, 2012
Those Revolting Europeans
By PAUL KRUGMAN
The French are revolting. The Greeks, too. And it’s
Both countries held elections Sunday that were in effect referendums on the current
European economic strategy, and in both countries voters turned two thumbs
down. It’s far from clear how soon the votes will lead to changes in actual
policy, but time is clearly running out for the strategy of recovery through
austerity — and that’s a good thing.
Needless to say, that’s not what you heard from the usual
suspects in the run-up to the elections. It was actually kind of funny to see
the apostles of orthodoxy trying to portray the cautious, mild-mannered François Hollande as
a figure of menace. He is “rather dangerous,” declared The Economist, which
observed that... he “genuinely believes in the need to create a fairer society.”
What is true is that Mr. Hollande’s
victory means the end of “Merkozy,” the Franco-German axis that has enforced the
austerity regime of the past two years. This would be a “dangerous” development
if that strategy were working, or even had a reasonable chance of working. But
it isn’t and doesn’t; it’s time to move on. Europe’s voters, it turns out, are
wiser than the Continent’s best and brightest.
What’s wrong with the prescription of
spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist
— that is, claims that slashing government spending would somehow encourage
consumers and businesses to spend more have been overwhelmingly refuted by the
experience of the past two years. So spending cuts in a depressed economy just
make the depression deeper.
Moreover, there seems to be little if any
gain in return for the pain. Consider
the case of Ireland, which
has been a good soldier in this crisis, imposing ever-harsher austerity in an
attempt to win back the favor of the bond markets. According to the prevailing
orthodoxy, this should work. In fact, the will to believe is so strong that
members of Europe’s policy elite keep proclaiming that Irish austerity has indeed
worked, that the Irish economy has begun to recover.
But it hasn’t. And although you’d never know it from
much of the press coverage, Irish borrowing costs remain much higher than those
of Spain or Italy, let alone Germany. So
what are the alternatives?
One answer — an answer that makes more sense than almost anyone
in Europe is willing to admit — would be to break up the euro, Europe’s common currency. Europe
wouldn’t be in this fix if Greece still
had its drachma, Spain its peseta, Ireland its punt, and so on, because Greece
and Spain would have what they now lack: a quick way to restore
cost-competitiveness and boost exports, namely devaluation.
As a counterpoint to Ireland’s sad story, consider the
case of Iceland, which was ground zero for the financial crisis but was able to
respond by devaluing its currency, the krona (and also had the courage to let
its banks fail and default on their debts). Sure enough, Iceland is
experiencing the recovery Ireland was supposed to have, but hasn’t.
Yet breaking up the euro would be highly
disruptive, and would also represent a huge defeat
for the “European project,” the long-run effort to promote peace and democracy
through closer integration. Is there another way? Yes, there is — and the
Germans have shown how that way can work. Unfortunately, they don’t understand
the lessons of their own experience.
Talk to German opinion leaders about the
euro crisis, and they like to
point out that their own economy was in the doldrums in the early years of the
last decade but managed to recover. What they don’t like to acknowledge is that
this recovery was driven by the emergence of a huge German trade surplus
vis-à-vis other European countries — in particular, vis-à-vis the nations now
in crisis — which were booming, and experiencing above-normal inflation, thanks
to low interest rates. Europe’s crisis countries might be able to emulate
Germany’s success if they faced a comparably favorable environment — that is,
if this time it was the rest of Europe, especially Germany, that was experiencing
a bit of an inflationary boom.
So Germany’s experience isn’t, as the Germans imagine,
an argument for unilateral austerity in Southern Europe; it’s an argument for
much more expansionary policies elsewhere, and in particular for the European
Central Bank to drop its obsession with inflation and focus on growth.
The Germans, needless to say, don’t like
this conclusion, nor does the leadership of the central bank. They will cling to their fantasies of
prosperity through pain, and will insist that continuing with their failed
strategy is the only responsible thing to do. But it seems that they will no
longer have unquestioning support from the Élysée Palace. And that, believe it
or not, means that both the euro and the European project now have a better chance
of surviving than they did a few days ago.