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September 12 2011



Key agents in this drama were the bank technocracies, both national and international, and the European Commission. The vilains de la pièce are the democratically elected governments (regardless of their political inflection), who  passively transferred constitutionally relevant powers to such technocracies.

The ‘therapies’ based on fiscal austerity are the ultimate outcome of such a chain of decisions. It is said that they will stop speculative attacks. I argue that they will simply prepare fresh bases for new attacks, triggered this time by recession indicators and/or by the absence of relevant improvements in the debt/GNP ratios. There is only one way to frustrate such speculative attacks: rendering the ECB a lender of last resort for sovereign debt, as recently argued by P.De Grauwe, D.Gros, S.Micossi; that is, by restoring a pre-1980 institutional way of organising economic policy making. But the ECB resists such a suggestion, with the support of European governments.

As Susan George puts it bluntly: “The ECB is the obstacle to success, not the Euro per se. The ECB doesn’t lend to governments but to banks, at 1% or less, and then banks lend to governments ... The ECB unlike every other central bank doesn’t issue Eurobonds. So we have government by the banks and the ratings agencies”. And as for the polity abdication she adds: “Now the European Commission wants to examine all individual country budgets before their parliaments vote on them to make sure they meet certain standards. This is a blatant attack on democracy”.

This is a straightforward, though partial, answer to the question raised at the start of the debate on ‘The road to Europe’ by Rossana Rossanda, when she asks: Was starting from the monetary union the right strategy for building the political union of Europe? Mario Pianta has provided a further part of the answer by reconstructing, from a historical economic perspective, what has happened. What I want to explore further in this article is how this absurd process came about; that is, secured by which cultural distortions, wrong reasoning, and false popular beliefs.


The road to Europe: the eclipse of reason and democracy | openDemocracy - 2011-09-12

July 05 2011

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Real Estate Saves Capitalism Then Bursts - China Next?
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