The European bailout programmes are over. On 20 August 2018, after almost eight years and hundreds of billions of euros, Greece was the last EU Member State to leave its financial assistance programme. Athens can now borrow from financial markets like other countries, and the Greek economy grew by 1.4% last year. Surely the worst is over?
Not so fast. For one thing, the impact of the crisis has been so severe that it calls into question the long-term health of Greece: the Greek economy has shrunk by a staggering 25% since 2008, unemployment is still much higher than the Eurozone average at 20% (and youth unemployment is closer to 40%), and Greece still has debts totalling roughly 180% of its annual GDP. The country may have left its bailout programme, but creditors have nevertheless forced Greece to cut spending and run a budget surplus until at least 2060, which some economists (including from the IMF) warn is unsustainable.
The situation is better elsewhere in the Eurozone, but not drastically so. Italy has debts over 130% of its GDP, and investors seem jittery about a populist-led government that has pledged to slash taxes and raise public spending. The ECB is ending its quantitative easing programme in December 2018, but that will still leave it holding over €2.5 trillion of Eurozone government debt on its balance sheet (more than twice the €1 trillion the programme was originally supposed to run to).
Is the European debt crisis finally over? Or has Europe failed to enact the reforms needed to provide long-term sustainability? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!
ΝΟ…..this might be the beginning of the end for greece
No….greece remains mired in debt with no chance of escape w/o a write off.
Italy public debt continues to escalate….most european banks still vulnerable to the next crisis…….still the case that the north continues to do well ( economically)…whilst the south stagnates.
It has only just begun, you will be in crisis with the Euro until Nation States take back their respective currencies. .
No, another one is coming
Ivan, before the euro was created, countries with a lesser efficient economy could devaluate their own currency against stronger currencies and then attract tourism and industries, which out of greed, would invest to enhance profits and personal gain. That was not really sane.
We may look for references way back in history:
In Egypt and under the Pharaoh, it seems that the Egyptian empire had very similar economic weakneses -as we see them in capitalism today. Farmers then would be caught in a debt trap -in a cyclic way. The Pharao would emit a debt-cut every seven years, and farmers would restart borrowing money, but then having no debt any more from the previous 7 years. Farmers would pay interest, but never as much as we pay today. 40 to 50 % of our income is derived in taxes to pay for our debt -the interest rate alone- today. In purely mathematical terms, there is no way this beast can be tamed. Greed is beyond reason. And people obey. They drown in debt. And they do not see that they are responsible for the drowning.
The banking system today is the Pharao of modern times, but it is a very greedy and short sighted Pharaoh: it kills the hen of golden eggs. We could maybe state, the banking system today, has no other intention than to enslave citizenship in a way far worse than the pharaoh did. And they do not do so today, to build pyramids. They have no idea for what they do so. It is pointless cruelty and greed. There is no purpose behind it. It’s destructive, outmost silly, endlessly insane. Even those billionaires adressing the problem and proposing solutions are threatened in such a deep way, that they stop believing their own ideals. Like the black sheep, they are pulled back into the herd. This happened earlier this year, with the global challenges foundation and their prize. It’s brutally stupid and coward, the way it went.
Consequently, we may state:
A source and a consequence from trauma, greed, drives our societies. The income gap has grown in staggering fabulous ways: how comes that we allow society to develop in a way, so that 11 billionaires have as much wealth as the 3,5 billion people? (as reported by OXFAM international)
That is insane, for many reasons, the main reason being, that those billionaires can not by any means spread wealth through spending in a way that puts the economy in good shape. The way super rich people spend is corrupting. It is not based on diversity, because they can not bare and cope with the complexity they them selves have created. In order to sustain and support diversity, you need many brains to work in a cooperative way. Ostracism, authoritarian and irresponsibly contradictory attitudes do not provide for cooperation. The result is, that the billionaires them selves end up buying coca-cola shares, forcing sugar consumption on humanity and promoting industries which the WHO condemns, because they lead to i.e. diabetes. These billionaires then pass money which they earn from shares to the WHO and condition the way the WHO is supposed to spend their money, forbidding research on i.e. diabetes, because that would run against their economic interest, ruining the shares of coca-cola. This is a ver sick economy. And if they argue that people are stupid because they drink coca-cola, then it gets worse. Then it amounts to a terrible cynicism.
The result is ostracism, corruption, impunity, frustration, anger, unsustainable spending of money, carelessness, greed, envy, etc. There is not enough bad words to describe this state. And this is what we describe as the system of violence in science. This type of plutocracy-economy simply is no economy. It is the source for fascism, deterioration of social ties and sociability in general, it creates hate instead of love and supports populism. It leads in the end to a climax of violence, which may end as war, as we had it due to fascism. Populism is a path to fascism. Fascism was born after an economic crisis like the one described here, back in 1929. https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
By the way, these economic crisis are normal in a society in which the elites drive wars (see what General Wesley Clark had to explain: https://www.youtube.com/watch?v=B3B5xzApMZg. Wars are best creating transactions costs, which enrich the elites (owners of the weapon manufactures and industries producing vital goods for wars) and are paid from tax money. Elites promote a narrative pretending they provide security, which they don’t. They provide for the problem and then sell us a solution which makes the problem even worse. What shall we do with elites like this?
Consequently, Germany i.e. has become a country in which most people work with low wages, and do not protest. The game with wars was set way before the wall in Berlin fell. But the war business started piling up, as soon as 1990 was over. German citizens do not see the scheme. They simply work, like the sheep eat grass.
Instead, at the faculty of history in Toledo University, Spain, professors explain to students, why the oligarchy of power is turning into tyranny, since they do not need German citizens any more to defeat communism with a fata morgana: the illusion of wealth … Communism is gone. We may now get rid of the useless and molesting peasants. Remeber how Sparta ended?
And then, even if we look at those examples which are in fact good and sustainable, we grow desperate, because they do not build up sufficient critical mass:
If we follow the philosophy of intelligent people like Silvio Gesell http://www.naturalmoney.org/NaturalEconomicOrder.pdf, we see that in the past and precisely in the time of the rise of fascism, Silvio Gesell made huge progress where he was allowed to, with his circular currency, a currency emitted without the teeth of greed: interest.
That was interesting, but it did not stop fascism and WWII
In my understanding, we are doomed. The level of consciousness may be rising, but it rises slower than the level of greed and trauma defeating empathy. We lack intelligence and courage, which allow for empathy.
We know what humans can commit as atrocities, if they have no empathy. Pol Pot is not the last example of a dirty job. Wars in Middel East are pretty much the same. And all the people who commit themselves to cruelty, walk along. This is not a good state of humanity.
Peace mediation never was, never existed. We managed in the past, at maximum, to provide for a truce. And now, as we never learned to set up peace as a social status, we will be annihilated by our own stupidity. I have failed. I was not intelligent to help enough people understand. I am sorry.
I have deserted human kind. I am closer to physics than ever. I describe myself as a complexity pattern. The end of humanity, is for humanity. I want to survive. But people do not understand. It’s a pitty, very sad. Maybe, the best way I can help humanity is by deserting humanity and proposing a new definition of the self, a radical step. Humanity needs to die. We need to morphe into a new stage. We maybe shall survive as complexity patterns.
I support your analysis. But do you have some ideas for your ending words „People do not understand“ ?
As always, I agree with your analysis. But as Heinz asks, I too have to ask what does “surviving as a complexity pattern” actually mean?
Humanity is fading due to rising of misconceptions :
-individuality versus individualism. We supposed to develop individuality by our participation in the social life, with family friends, art nature and work.
In fact, most of the people try to used others and nature to have more and more things, property, social status.
-what we are versus what we show :
As a book and is cover, one is reflecting sometimes the other. Sometimes…
RACISM in the EU is just anarcocapitalism… they just tell the people that they are the good ones and the others the bad ones but in the midwhile they control easier and in a more totalitarian way justice and laws. They just collect votes with that stupid hate speech. They just repeat their fallaciae. And bash the ones who don’t thing like them or repeat their speech. But nothing changes for the voters and the corporations stay in control.
no, i trust EU. they will make sure that we are well-fed and enough money in the banks.
If elite decide it will be
Eventually, the European authorities will conclude that the only way out of the debt crisis will be inflation, causing an enormous transfer of wealth from savers to borrowers and corresponding dramatic reduction in the debt/GDP ratio and affordability of debt service. The longer they resist this conclusion, the longer the pain will go on and the more unpleasant the conclusion. Germany will naturally resist this to the last.
The European Economies are so different, that the case of Greece was only the beginning. A normal economy that is unhealthy would decrease the value of their currency to match their economic position. But due to the fact that the Euro is a currency used by almost all EU member states, the currency’s value is dependent on all economies and can’t be devalued. The artificial process of quantitative easing is what keeps the currency on a stable value, but the thing is, bonds that aren’t worth anything, simply aren’t worth anything. The subprime mortgages are a clear example of that. So in the future, the ECB will hold a massive portfolio of worthless bonds, and then what?
Greed can be good. It helps humanity progress or we would still be stuck in caves. The problem with Europe is they set rules to ensure financial stability and then ignored their own rules. Out of the 15 countries that joined the Euro in 1999, how many passed the test? I think it was 2. Greece was already seen as an issue then.
This debt issue will not stop. Greece would be better of defaulting, walking away from Europe and the EU ccy.