The Eurozone is in recession because it is an exporting bloc and its' key markets (not least countries like Britain) are just not buying. You would hardly know it from reading the British press but the Eurozone as a whole still has a TRADE SURPLUS with the rest of the world. When was the last time that Britain ran a trade surplus? The 1980's? Yet this article (and hundreds like it) paint a picture of a frustrated UK economy, raring to go, just waiting for an enfeebled Eurozone to buck its ideas up. It’s back-to-front new-speak garbage - the Eurozone will be out of recession the moment its customer countries (like Britain) start buying again.
You can’t suddenly decide to have an export-led economy when a crisis hits and it’s clear that your financial and services sectors are a parasitic dud or that running an economy based on bumping house prices and buying from each other is a daft Ponzi scheme. Manufacturing reputations take decades to establish and Britain comprehensively trashed its reputation in the 60’s, 70’s and 80’s with crap products and poor leadership.
The entire world economy is in trouble right now and every country is hoping that ‘exporting’ will dig it out of a hole. That’s why Japan has just pledged to rubbish the value of its currency and invite inflation in through the front door. Britain trashed the value of the pound against the Euro as soon as the crisis hit, but as a net importer, it has only served to stoke the deficit.
There is a bigger picture here which has a lot to do with global energy availability (don't believe the recent 'revolutionary' shale hype, it's yet more PR garbage), landfill consumerism and environmental awareness. We can see that with even a relatively modest drop in demand, the world economy comes crashing to a halt. Yet for the sake of the environment, demand for all kinds of useless, pointless consumer crap needs to collapse still further…much, much further.
The ‘return to growth’ mantra is getting boring and showing up humanity as an uncreative, unimaginative race of lemmings. Actually, on second thoughts, I credit lemmings with more sense...
Dixon at Commerzbank says politicians will have to give up on the idea of a quick fix: "There's been a realization among policymakers that we're not going to get the typical V-shaped recovery, and the sooner we all get used to that, the better. You get seven fat years and then you get seven lean years, as the Bible says: it's not a new phenomenon."Is that the Gideon's Bible?
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Austerity Is No Longer
The Answer, Says Barroso
Support for relaxing Europe's austerity drive from a top EU official could be a significant break for countries struggling to hit tough budget targets amid persistent economic weakness.
The EU's focus on austerity has hit the limits of public acceptance, according to the head of the trading bloc's executive arm, as Brussels joined the International Monetary Fund in raising concerns over the impact of public spending cuts.
José Manuel Barroso, president of the European commission, also signalled that governments would be given more leeway if they were struggling to get their budget deficits within the required ceiling of 3% of GDP.
He said the argument raging over the merits of austerity versus more public spending was a false debate – the answer was to combine the two, although public spending cuts alone would not provide the solution.
"Socially and politically, one policy that is only seen as austerity is, of course, not sustainable," Barroso said. "We haven't done everything right … The policy has reached its limits because it has to have a minimum of political and social support."
l País is reporting this morning that Brussels has granted Spain another 2 years to reduce the deficit to 3%.
You can give Rajoy 30 years and he still won't manage to achieve that. When you need to spend half of your day trying to cover op your Swiss accounts and corruption scandals you don't have much time left to fix the economy.
Give it another three years of economic depression and, yes, either communism or fascism will prevail in Greece. Given the recent failure of communism and all the radical changes in property relations it requires, as well as the easier and more practical solutions proposed by the fascists (i.e. throw out all immigrants and hey presto you will have more jobs and less crime) the fascists might have an advantage. I have no doubt that the same would have happened in other places in Europe under similar economic conditions... and yes it has already happened in several other places in Europe back in the 30s and the main reason was guess what: "economic depression".
So, if you want something to change in Greece come out and say it loud: End this depression now. It needs to happen even if this means exit from the Euro. Just complaining about the supposed failure of all those who applied the austerity and those who resist it does not help.
As things go Greece will exit the Euro in a couple of years with 35% unemployment and half its economy. And why is this? Because the ruling classes in Greece have preferred not to stand up to these destructive economic policies and prefer to sell off the country and starve the people instead of risking seeing their property and assets devalue out of the euro. My prediction is that going over 30% unemployment will be the event that will set big developments in Greece, starting with biog demonstrations that will bring down the government.
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