Thursday, 3 November 2011

Neoliberalism is threatening to bring down the economies of the USA and the EU

What we are witnessing with the Greek tragedy that is unfolding is something worthy of Euripides, or, in a more contemporary form, Shakespeare. Greece is being torn apart by the Eurocrats, headed by  Sarkozy and Merkel, in their desperate attempts to preserve the Euro-empire. The Greek Prime minister, Georges Papandreou, offered a way out of the situation, by giving the Greeks a chance to vote against the bailout, but the self serving  political class in Greece look like scuppering this appeal to democracy by looking after their own skins and  bending the knee to the Eurocrats and the IMF.

Georges Papandreou

What is so ridiculous about all this is that the EFSF, which is supposed to bailout Greece, and is primarily intended to save French and German banks, is doomed to failure. It cannot work because the more austerity that is imposed upon Greece the less likely it is to be able to repay its debts. The Greek economy has already undergone a 15% contraction, and more austerity can only make this worse. As deficit reduction bites harder, the more it will contract the Greek economy, making the debt ever harder to pay off. The Greek economy is in a death spiral and the actions of the Eurocrats are self-defeating. As the situation gets worse, Greece will become more ungovernable. It may even become a failed state, and the likelihood that other EU members like Italy will begin to slide into the abyss will be increased.

The neoliberal-EU project enshrined in the Lisbon treaty has not only failed, but has seriously damaged the fabric of European societies.  Neoliberalism has wreaked similar havoc in the USA. The result is that once powerful western economies are now going cap in hand to China, which is a totalitarian waged slave-labour state, for financial handouts. The madness is complete, but the Eurocrats are so blinkered and institutionalised that they cannot see they are in danger of destroying the EU altogether.

There is only one solution. Let Greece default and leave the Euro, and then build the reconstruction of Europe through investment in the real economy, in infrastructure, and in jobs, through a Green New Deal. The Icelanders held a referendum which lead to a default, and an exit from debt-slavery, and the Greek people deserve the same chance.  Meanwhile, destructive neoliberalism must be chucked in the dustbin of history - where it belongs.

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