The Eurozone Crisis Thread

I don't know about Hungary, but Poland's pretty substantial demographically and getting more so economically.

Not enough is being done, I agree, and it is a failure on the EU's part no matter which way you slice it. Orban in particular makes a habit of saying one thing when he's in Brussels and wholly another when he plays for a home audience. He is about as egregious as it gets.

xp

Easier to not admit than to kick out - though threats have been made against Poland’s ability to vote if PiS continues to muck about with the judiciary. Enforcement powers are subject to veto, though, and the Visegrad group have a collective interest, to some extent, in them not being voted through.

It’s pretty likely the rest of the EU will put some kind of financial pressure on them sooner rather than later though.

Didn't know where to put this, but Spain's Rajoy is almost certainly a dead man walking because of corruption.

Good riddance.

Lol what sort of cuck loses power cos of corruption in 2018

Tom D. otm. Particularly nice touch that it's five Basque MP's that are going to put him on the grill.

Long time comin

Interesting reading the Lisbon discussh upthread. I was just there last week. I hung out with an econ journalist friend of mine and he basically backed up everything Daniel was saying. Economy totally unbalanced towards tourism, it's changing the city centre and not for the better, house prices have gone through the roof because people can use their flats as tourism money-makers, actual people who live there now pushed out. Everything gentrified. Jobs are in the service/tourism industry. etc

yes I've heard the same thing from locals there. they're concerned that this tourism push is a last gasp effort to recover something of a european economy and that if it fails, there is no other hope, for what is at base still a small agricultural country.

Looks like I picked the wrong time to quit sniffing glue go to Lisbon.

I hung out with an econ journalist friend of mine and he basically backed up everything Daniel was saying.

Your friend sounds like a smart guy.

:D

this guy! http://www.jornaleconomico.sapo.pt/noticias/autor/shrikesh-laxmidas

B-but Portugal - unlike the childish Italians - got on with the programme. Why is this happening?

https://www.theguardian.com/commentisfree/2018/may/30/italy-brussels-descent-abyss-eu-economics

Well, the previous govt got with the programme. Current one - being as it is in an alliance with the communist and leftist parties - kind of a detour from that (though not as much as many would hope).

there seems to be a boom in call centers / outsourced service jobs in Lisbon/Porto - maybe this type of industry is temporary, but building up infrastructure/expertise couldn't hurt?

btw Tom D. I'm Lisbon based in case you fancy a tiny draught beer

Adios, cabron

Good news on the removal of Rajoy, but what's the expectation on how things pan out after this? I don't know anything much about Pedro Sánchez and PSOE.

Wow, Conte gives up!

Life comes at us fast... (is there Italy debacle discussion on another thread?)

there seems to be a boom in call centers / outsourced service jobs in Lisbon/Porto - maybe this type of industry is temporary, but building up infrastructure/expertise couldn't hurt?

You're probably a better judge of whether this is an new boom than I am at this stage, but call centre jobs were the main ppl hiring during the worst crisis years. People burn out on those jobs very quickly is the thing.

Excellent piece on Portugal:

https://jacobinmag.com/2018/06/portugal-left-bloc-socialist-party-austerity

Tom D. otm. Particularly nice touch that it's five Basque MP's that are going to put him on the grill.

― lbi's life of limitless european glamour (Le Bateau Ivre), Thursday, 31 May 2018 14:05 (two weeks ago) Bookmark Flag Post Permalink

hungry now

started on adam tooze’s history of the financial crises since 2007, Crashed. part 3 is entirely devoted to the eurozone which he sees as a “massive aftershock of the earthquake in the North American financial system of 2008” (his central contention is that europe’s attempts to pin the blame for that solely on the US are at best wrong and at worst mendacious and self-interested). these are his comments in the introduction:

It is a short step from there to concluding that the hidden logic of the eurozone crisis after 2010 was a repetition of the 2008 bank bailouts, but this time in disguise. For one sharp-tongued critic it was the greatest “bait and switch” in history. But the puzzle is that if this were so, if what was happening in the eurozone was a veiled rerun of 2008, then at least one might have expected to have seen American-style outcomes. As its protagonists were well aware, America’s crisis fighting exhibited massive inequity. People on welfare scraped by while bankers carried on their well-upholstered lives. But though the distribution of costs and benefits was outrageous, at least America’s crisis management worked. Since 2009 the US economy has grown continuously and, at least by the standards set by official statistics, it is now approaching full employment. By contrast, the eurozone, through willful policy choices, drove tens of millions of its citizens into the depths of a 1930s-style depression. It was one of the worst self-inflicted economic disasters on record. That tiny Greece, with an economy that amounts to 1–1.5 percent of EU GDP, should have been made the pivot for this disaster twists European history into the image of bitter caricature. It is a spectacle that ought to inspire outrage. Millions have suffered for no good reason. But for all our indignation we should give that point its full weight. The crucial words are “for no good reason.”

this whole section is savage on the european response:

This is not to say that the individual actors in the drama—Germany, France, the IMF—lacked logic. But they had to act together and the collective result was a disaster. They inflicted social and political harm from which the project of the EU may never recover.

Far from being beneficiaries of EU crisis management, business was one of its casualties, and the European banks above all. Since 2008, it is not just the rise of Asia that is shifting the global corporate hierarchy. It is the decline of Europe. This might ring oddly to Europeans used to hearing boasts of Germany’s trade surplus. But as Germany’s own most perceptive economists point out, those surpluses are as much the result of repressed imports as of roaring export success. The inexorable slide of corporate Europe down the global rankings is clear for all to see. Though we might wish otherwise, the world economy is not run by medium-sized “Mittelstand” entrepreneurs but by a few thousand massive corporations, with interlocking shareholdings controlled by a tiny group of asset managers.

If we take the cynical view that the basic mission of the eurozone was not to serve its citizens but to provide European capital with a field for profitable domestic accumulation, then the conclusion is inescapable: Between 2010 and 2013 it failed spectacularly.

"Millions have suffered because the Germans demanded it, and because it suited the political purposes of conservative elements in other EU countries who wished to weaken the welfare state, but economically speaking it was for no good reason."

fixed (xp)

and although he hasn’t got to it here yet, i have seen him explicitly show the link between Europe’s painfully slow and inadequate response to assisting countries around it, leading to the requirement for the US to find a way to get dollars to Poland and Hungary, in the end via the IMF, a necessary action due to europe’s *inaction* that directly assisted Orbán’s rise to power.

well, that’s not exactly what he says, obv, but it will be interesting to go into the detail of it - but he points to conservative politicians and dogmatic central bankers. the central problem as he presents it in this introduction at the moment is a failure of understanding of the problem and as it became clear a failure to act quickly enough. after all as he says, this wasn’t just a social disaster, it was a disaster for european capital, which those people in power, cynically speaking, would presumably be wishing to defend.

(xpost to the Big A)

The political-economic analysis of moneyed conservative EU interests in 2010 may not have proved correct in the event, but even capitalists sometimes approach politics with more bias than rationality.

The political-economic analysis of moneyed conservative EU interests in 2010 may not have proved correct in the event, but even capitalists sometimes approach politics with more bias than rationality.

semi-related tooze piece (a review of a history of neoliberalism):
https://www.dissentmagazine.org/article/neoliberalism-world-order-review-quinn-slobodian-globalists

the key point -- the (re)fashioning of a kind of "empire" of activity unconstrained by and in its turn constraining tendencies within national politics -- is obv relevant to the EU, but also i think more broadly to third-wayism in general. anyway it claims to have important implications for what the left has also not yet got its head round, re the collapse

I loved The Deluge + Wages of Destruction, so looking forward to Crashed.

I'm currently reading that book by Quinn Slobodian, and it's very good.

surely this is one of the most infuriating economic crimes in EU history: https://cumex-files.com/en/

is there a thread for shouting FUCK INVESTMENT BANKERS ?

Discussing it a bit in the 'European Politics' thread.

https://www.bbc.co.uk/news/amp/world-europe-45954022

The EU has rejected Italy’s budget - partly related to planned spending increases to guarantee a minimum basic income.

also partly related to tax amnesty and tax cuts for rich ppl

I was looking at some Tooze graphs the other day which suggested Italy's public finances have been pretty much in line with Germany's in the last 20 years, but huge 70's/80's debt repayments have been hampering them. Sick of hearing those Five Star wankers described as "anti-establishment".

Yeah Italy's budget deficit has been relatively small by the standards of European nations, it's the size of the debt that's killing them.

Is it giving the Italian government too much credit to suggest they might have put this budget forward in the full knowledge that it would be rejected? If you wanted to flaunt a piece of anti-EU propaganda then you could hardly have been gifted a better opportunity.

Otm, I think that's exactly what happened.

As far as I can tell their government structure is like Nick Clegg trying to rule a coalition of Momentum and UKIP.

My guess is Five Star and League banked on the EU being too distracted by Brexit to care, or see Italeave as too risky so wouldn't want to rock the boat.

Itexit, surely to goodness >:(

partly related to planned spending increases to guarantee a minimum basic income.

Although its not universal as I have seen reported (a while ago now)

https://foreignpolicy.com/2018/10/24/this-is-an-existential-test-of-the-eurozone/?utm_source=PostUp&utm_medium=email&utm_campaign=7450&utm_term=Editor

The balance in particular between inflated stock valuations in the U.S., despite recent corrections, and the tightening interest rate situation, which destabilizes the bond market, is a very precarious one. You could easily have offsetting effects, where panic-stricken money flees Italian debt into safer German and American debt. American debt is still, believe it or not, a safe haven asset. But for the eurozone itself, this is a mortal risk. This is an existential threat.

cos I don't believe it!

BREAKING: Angela Merkel will quit as head of Germany's Christian Democratic party after nearly 20 years, source says https://t.co/RJ1VPouz4b pic.twitter.com/0QaxynRZCg

— Bloomberg (@business) October 29, 2018

The Green vote is up and other left party votes have held up I think.

https://pbs.twimg.com/media/DqnaYAaWoAEk35B.jpg

good day for the Greens.

And for Fascists :(

every day seems to be a good day for them unfortunately.