Monday, November 11, 2013

Eurostat’s failures greatly increase the size of Greece’s debt

Let us think for a moment what would happen if, all of a sudden, the debt of the French transport system, covering buses, trams, the metro, the RER and OPTILE and the PAM network for disabled people and so on, were all transferred to the government’s accounts. After all, the French transport system is heavily subsidised by the state. Well, the disaster one can only imagine did not happen in France, and rightly so, but it did happen in Greece! Greeks and all other European citizens have the right to know what happened in Greece and why it happened.

All of us in Europe have agreed to comply with certain terms and conditions called European Regulations and the first to do so is, alas, the European Commission. Therefore, if.....

Sunday, September 29, 2013

Cautionary Tale: Austerity, Inequality Europe

European austerity programmes have dismantled the mechanisms that reduce inequality and enable equitable growth. With inequality and poverty on the rise, Europe is facing a lost decade.  An additional 15 to 25 million people across Europe could face the prospect of living in poverty by 2025 if austerity measures continue. Oxfam knows this because it has seen it before.
The austerity programmes bear a striking resemblance to the ruinous structural adjustment policies imposed on Latin America, South-East Asia, and sub-Saharan African in the 1980s and 1990s.
These policies were a failure: a medicine that sought to cure the disease by killing the patient. They cannot be allowed to happen again.
Oxfam calls on the governments of Europe to turn away from austerity measures and instead choose a path of inclusive growth that delivers better outcomes for people, communities, and the environment.

The wave of economic austerity that has swept Europe in the wake of the Great Recession is at risk of doing serious and permanent damage to the continent's long-cherished social model. As economists, including my-self, have long predicted, austerity has only .......

Thursday, April 25, 2013

Why Austerity Is a Dangerous Idea

by Mark Blyth
The current debt and deficit panic is nothing new. It’s been a staple of American politics since the Republic’s inception. But this season it has taken a new turn. Congress, the fiscal arm of the government, is engaged in asymmetric siege warfare. On one side the Republicans want only cuts, on the other the Democrats want both cuts and tax increases. Both agree however that cuts are absolutely necessary; the only question is the timing and magnitude involved. Unfortunately, budget cuts are exactly the wrong thing to do at this moment. And before anyone throws up their hands and says “Keynesian claptrap,” there is nothing necessarily Keynesian in what I am about to say. Simple logic and arithmetic will suffice.
Austerity, the policy of cutting state spending to solve debt and growth problems, sells itself to us through a strange combination of morality and seduction. Its moral claim lies in the love of parsimony over prodigality that characterizes economic thought from Adam Smith onward. In this morality play, saving leads to....

Saturday, March 16, 2013

TWIN EXPLOSION: The Current Debt System has Reached it’s Expiration Date

At the end of the millennium, a perfect convergence took place between the forces responsible for today’s looming storm: Indebtedness, the rise of neoliberalism, the collapse of communism, the information revolution, globalization and the «liberation» of the banking beast.

Surplus countries of the Euro-zone do not seem willing to either limit their excessive surpluses (by increasing the wages of their employees, so that domestic demand will increase), or to transfer «resources» to the members running a deficit, nor are they willing to «mutualize» public debt, or allow the transformation of the ECB into an actual central bank of the Euro-zone (Euro-bonds, direct purchasing of bonds from member states etc.).

As a result, the vicious cycle of banks «rescuing» states and, later on, states rescuing banks will perpetuate – thereby....

Monday, January 14, 2013

The Advent of Berlin (Part 2 of 2)

by Vasilis Viliardos
Mercantilism was ultimately rejected by the liberal and British Adam Smith, who also refused to wade into monetary policy – believing that products, people and institutions constitute the foundations, on which general well-being can be built on peacefully, and under conditions of freedom and democracy.However, many economists believed that mercantilism, in some cases, is not erroneous.
The most important among them was J.M. Keynes, who incorporated some elements of mercantilism in his theory – stating that the money supply, the foreign trade balance and prime interest rates are very important for an economy (believes that where later used to set the grounds for modern monetarism).
Adam Smith rejected the sole focus on production mercantilists thought to be the key – believing that consumption is the only way to develop an economy. In contrast, Keynes considered both the production and the consumption as being equally important for economic growth – recognizing also, that...