[A-List] Fwd: [R-G] Whither or Wither Europe?
Suzanne de Kuyper
suzannedk at gmail.com
Sun Aug 22 07:11:16 MDT 2010
Gary is wrong that Paye is so on left field his analysis does not
apply to the realities on the ground. Paye is right on, entirely.
Obama is doing a snow job as he did about the BP oil eruption, about
the Georgian War, and thousands more.
Assumptions can blind us as the Americans have know well. Suzanne
---------- Forwarded message ----------
From: Gary Crethers <garyrumor2 at yahoo.com>
Date: Sun, Aug 22, 2010 at 5:40 AM
Subject: [R-G] Whither or Wither Europe?
To: Suzanne de Kuyper <suzannedk at gmail.com>
Whither Europe?August 21st, 2010
I have read a couple of recent economic reports on the internet and am
ruminating over the significance of them. One is fairly straight forward from
‘Economy Watch’ It is a review of the statistics supplied by Eurostat from 2009
to look at trends which they see as ominous in particular the income
disparities between north and south Europe and how the austerity programs will
hurt the south a lot more than the north. The other is from ‘Spectrezine’ with
an article by Jean-Claude Paye the Belgian Sociologist who sees an insidious
German and American conspiracy to destroy the independence of the EU. According
to Paye the USA needs Europeans to buy the American debt, and to warn China
away from buying Euros by destabilizing the Euro. Germany is participating by
creating a new two continent market as the EU can no longer absorb its
production. A bit about Christina Romer from Wikipedia. From the ‘EUobserver’
we have an article about the effects of IMF austerities on the Greek people.
The next piece is from the BBC and it is a summary from a liberal British view
of the austerity measures. My last one is from WRAL.com, with a bit about
Obama’s opposition to austerity measures by Europe meaning Germany.
This is from Economy Watch.
“Eurostat Review Confirms / Upsets Conventional Views re Eurozone Economies
14 August 2010
With the recent announcement of a post-unification “record” for German economic
growth this past quarter - on which we will have more next week - and the
equally bad news from Spain and Greece - we thought it appropriate to consider
some of the revelations contained in the 2009 regional yearbook of Eurostat,
the EU’s official statistical agency. Overall, the yearbook indicates the
danger of a two-speed recovery across the 16-member euro zone is getting worse
with every new notch of belt-tightening that European governments apply to
reduce high debts and deficits. Forecasters, including the International
Monetary Fund, have downgraded their growth projections through next year,and
anticipate that the speed of recovery will vary greatly from region to region
as austerity measures kick in. While some European countries are using
austerity as an opportunity to push improvements to productivity and
competitiveness for the long run, these measures may actually further widen,
rather than bridge, Europe’s divide. That’s because cuts to government services
and higher taxes will be easier to implement in countries that have already
experienced faster growth, and a greater challenge for slower-growth countries
that still need government spending to boost demand. Fiscal tightening will
likely to be especially challenging for the southern rim of Europe, parts of
which have long been hindered by poor infrastructure investment and development
and a lifestyle where flexibility for workers is a long-cherished ideal. There
are also political and cultural impediments to implementing austerity measures
in some southern regions. Politicians know that voters pinched by austerity
will surely express their grievances in future elections, and workers used to
trading low-income, rote jobs for leisure time may not want tip that balance
toward more work unless compelled to do so. But in economic terms, it’s clear
that southern European countries will have to fix these and other problems to
eventually catch up with their northern neighbors. If such a divide widens, it
could pose problems for the stability of the euro, and, in our view, sooner
rather than later. Countries that have been plagued by an interior north-south
divide — like Italy and Spain — will have an even greater hurdle to clear.
Politicians and businesses are being challenged as never before to bridge a
divide that, if unchecked, can weigh on a country’s entire macroeconomic
Eurostat’s 2009 regional yearbook also reveals a stark contrast in unemployment
and working hours between northern and southern Europe, as well as within
individual countries. One piece, based on 2007 data, shows low levels of
unemployment recorded in all regions in the Netherlands and Austria, the
northern parts of Italy and Belgium and the southern parts of the United
Kingdom. Within countries, nearly the entire Italian south and much of Southern
Spain logged jobless rates that lagged the center and northern parts of the
nations. A separate Eurostat chart, released last year using 2006 data, shows
the severe divide within a country like Italy, where gross domestic product per
inhabitant was more than twice as high in the northern region of Bolzano as it
was in Campania, the poor southern region where Fiat’s lowest-producing factory
Finally, a note about working hours, according to this analysis from the New
Eurostat’s 2009 yearbook breaks down average working hours across Europe. While
Spain and Italy show that there can be big variations within a nation’s
borders, differences in time spent working are generally greater between
countries than within any given country. The data show that Eastern Europeans
spend more time at work than others in Europe, while those employed in the
Nordic countries and Britain tend to spend less time.
If that sounds counterintuitive, Eurostat goes on to note that the average time
spent at work doesn’t necessarily translate into a strong economic performance.
“In fact,” Eurostat observes, “it is precisely the reverse.””
Far from being the effect of the ‘invisible hand of the market’, the crisis of
the euro is the product of a strategy carefully designed by Christina Rohmer
and the White House Council of Economic Advisers. It is a matter of saving the
American economy by forcing the European capitals to take refuge behind the US,
and ultimately placing the Euro Zone economies under US control via the IMF and
the European Union. Jean-Claude Paye analyzes the first stage of the process
“The attack on the Euro and the dismantling of the European Union
August 17, 2010 17:02 | Jean-Claude Paye
The crisis of the euro results from a policy choice, that of the EU authorities
pawning off the common currency, instead of restructuring the Greek sovereign
debt. Such a restructuring could have safeguarded the euro, but it would have
necessitated a cash injection from the banks, which would have forfeited part
of their debt in the operation. The French financial institutions are said to
have about €50 billion of Greek debt on their balance sheets, whereas €28
billion is attributed to the German banks.
However, the protection of several dozen billions of euros held by the
financial institutions does not justify such risk-taking. The fundamental
stakes, in putting pressure on the euro, is to make the workers pay for the
crisis and thus to effect a gigantic transfer of income from households to
business, principally towards the financial institutions.
An American offensive
The scale of the transfer is such that it can only be managed by the European
institutions, though it is actually driven by the markets and their armed wing,
the US Administration. The euro crisis has been triggered by the concentrated
attack of the American ratings agencies Standard & Poor’s, Moody’s and Fitch
against the debt of Greece, Spain and Portugal. The downgrading of these three
countries - especially Greece - to the ’speculative investments’ category is
the result of a concerted action. The downgrading follows a series of repeated
and pressing decisions. These attacks have been endorsed by the US-state
machinery, notably through the alarmist declarations of Obama’s economic
adviser and former chairman of the American Federal Reserve, Paul Volcker, who
spoke of a prospective disintegration of the euro zone. The attack against the
euro appears like even more of a pretext when considering that “we’ve known
since 2004 that the Greek authorities have been lying”, which, however, induced
no reaction from the ratings agencies.
This offensive against the euro is primarily intended to funnel to the US the
foreign capital necessary to cover the growing US balance of payments deficit.
It is a warning signal to countries like China which has begun to rebalance its
currency reserves in buying the euro to the detriment of the dollar. For the
US, this is a matter of urgency. Until 2009, the financing of its deficits and
the defense of the dollar were assured by a positive balance of financial
flows. But, during that year, the balance of financial flows turned negative
($398 billion), adding to rather than offsetting the ongoing net foreign
borrowing requirements of the US economy. At a purely economic level, the
offensive against the euro is in the same vein as the struggle against tax
evasion, initiated by President Obama in 2009. They are both a matter of
drawing capital into the fold of the US.
An operation to dismantle the EU
This tactical action is coupled with a strategic operation, that of a drive to
dismantle the EU to the advantage of an economic union spanning the two
continents. The project to create a grand transatlantic market is the most
visible manifestation of this thrust. It is in light of the second objective
that one is able to understand the attitude of Germany which, just as readily
with the struggle against tax evasion as with the attack on the euro, has
provided support for the American offensive. This two-fold approach is
consistent with the commitment of this European state to the establishment of a
transatlantic economic union.”
You can go to the Spectrazine website for the rest of the article.
Here is a bit about Christina Romer from Wikipedia.
“Christina Romer (née Duckworth; born December 25, 1958) is the Class of 1957
Garff B. Wilson Professor of Economics at the University of California,
Berkeley and current Chair of the Council of Economic Advisers in the Obama
administration. She will resign from her role on the Council of Economic
Advisers on September 3, 2010, and will become a member of the President’s
Economic Recovery Advisory Board.
After her nomination and before the Obama administration took office, Romer was
tasked with co-authoring the administration’s plan to recover from the 2008
recession. With economist Jared Bernstein, Romer co-authored Obama’s plan for
economic recovery. In a January 2009 video presentation, she discussed details
of the job creation package that the Obama administration submitted to
I can’t verify that what Paye accuses Romer of orchestrating. I suspect what is
considered to be business as usual in Washington is considered to be economic
imperialism by countries like Greece.
This is from the EUobserver.
Amid mounting civil unrest, EU-IMF team gives Greece thumbs up
05.08.2010 @ 14:31 CET
EUOBSERVER / BRUSSELS - The EU and IMF have endorsed Greece’s economic
programme, required in return for a €110 billion bail-out agreed in in May.
Amid a paralysis of the country by striking lorry drivers, violent clashes with
riot police and small-scale bombings, a team of staff from the European
Commission, the European Central Bank and the International Monetary Fund have
been in Athens this past week for the first quarterly review of the
government’s austerity programme.
“Our overall assessment is that the programme has made a strong start,” the
commission-ECB-IMF ‘troika’ said mid-Thursday in a statement.
“The end-June quantitative performance criteria have all been met, led by a
vigorous implementation of the fiscal programme, and important reforms are
ahead of schedule,” the troika statement continued.
In May, the EU and IMF agreed to loan Greece €110 billion over three years in
return for a programme of public sector cuts, privatization and tax reforms -
the fourth such austerity package announced since the beginning of the
country’s debt crisis - that if the government is able to impose them despite
widespread popular opposition will thoroughly transform the relationship of the
state to its people.
The troika reported that Greek authorities have “kept spending significantly
below budget limits at the state level.”
The statement noted approvingly that these cuts at the national level had
“offset slippages” in expenditure at the regional and municipal level,
particularly regarding local government and funding of hospitals and social
“Impressive progress is being made on structural reforms. The mission welcomes
the parliament’s landmark pension reform, which is far-reaching by
international standards,” the troika said.
As part of the austerity programme, the government has indexed retirement age
to life expectancy changes, equalised men’s and women’s pension age limits and
raised the retirement age of public sector employees from 61 to 65.
The changes to pensions led to pensioners in May throwing rocks at the
parliament as other protesters attempted to storm the building.
There have been a series of one-day general strikes since the beginning of the
year in opposition to the multiple austerity programmes. In the spring, three
bank workers were killed when a contingent of protesters set fire to a bank
during one of the general strikes. Small-scale terrorist attacks blamed on
previously unknown left-wing groups, have also returned, echoing the “urban
guerilla” violence of the 1970s. Some 13 incidents, including bombings of
political party offices, MP homes, a bank, the Athens Stock Exchange and
government buildings, have taken place.
On Saturday, a guerrilla group called the Sect of Revolutionaries, claimed
credit for the murder of Sokratis Giolas, a blogger journalist close to
anti-terrorist police units. “Our guns are full and they are ready to speak,”
the previously unknown group said in a communique. “We are at war with your
The EU-IMF team also saluted the “substantive labour market reform underway”
and the changes to the transport sector: “Important progress has already been
made with liberalisation of road haulage and energy.”
The cheery approval of the changes, affecting lorry drivers’ licences, was in
stark contrast to the disapproval of those affected, who had paralyzed the
country with fuel shortages, crippled its travel industry and stranded hundreds
of thousands of tourists for much of this week. The government had issued an
emergency decree and enacted ‘civil conscription’ to try to force the lorry
drivers back to work. Some 500 strikers attempted to storm the transport
ministry and clashed with riot police who managed to chase them away after
employing tear gas. It was only when the government called out the army did the
truckers back down temporarily in exchange for further talks.”
There is more to this article a well written commentary on the real effects of
the austerities on a country that is on the front lines of the attempt to
recoup profits on the backs of the working people of Greece.
>From the BBC
Growth papers over Europe’s cracks
Gavin Hewitt | 10:51 UK time, Wednesday, 18 August 2010
The threats to the euro seemed to have passed. It was easier and less expensive
for governments to raise money. The banks were put through their stress tests
and most of them passed. Greece was praised for its budget-cutting rigour.
And then growth - which had proved so elusive - returned. The eurozone grew by
1% in the second quarter. That was more than many had hoped for.
Firstly, Europe’s growth is hugely dependent on Germany. It is once again an
economic powerhouse. Its exports are surging. Papers in Germany are calling it
a new “economic miracle”. The economy is now growing at its fastest in 20
years. If any country is hauling Europe out of recession it is Germany.
In the eurozone there are really three economies. There is Germany which in the
second quarter saw growth of 2.2%. It is way out in front of the rest of the
Then there are the middle-rankers like the Netherlands and France which saw
growth of 0.6%.
Then there are a clutch of weak countries at the back of the field. Spain, with
a growth rate of 0.2%, is barely out of recession. The Greek economy actually
shrank by 1.5%. Ireland is struggling.
So the great divide is widening. A relatively weak euro, brought lower by the
difficulties in countries like Greece and Spain, is benefiting Germany. Many
economists believe the euro is too strong for the weaker eurozone countries.
Now Germany remains committed to austerity. Even though tax revenues are
proving healthier than imagined, Berlin is committed to slashing its budget by
80bn euros (£66bn) over four years. A spokesman for Angela Merkel was quoted in
the Financial Times as saying that “consolidating the budget is the main
That is the message - get the deficits down, shrink the debt. Germany could
ease off but it won’t; it fears other countries would lose their appetite for
spending cuts. As Angela Merkel said earlier in the summer, when defending her
austerity package, Germany has to set an example.
The EU and the IMF have heaped praise on Greece. It has made “remarkable
progress” in cutting its spending. Down 40% this year. But its economy is
shrinking. It contracted 1.5% in the past quarter and is expected to decline by
4% for the year. Unemployment is 12% and rising. Tax revenues are less than
predicted. Investment is down. It is unclear where growth will come from.
Take Ireland. It was called the “poster boy” for attacking its deficit. It
embraced austerity early and courageously. Not only were public sector wages
cut, but benefits too. The pain was not spared. Carers are having their hours
cut. Some hospital beds are being closed. But more bad debt was discovered in
its banking system and its budget deficit has actually gone up to 18.6%.
Meanwhile, all around are signs of deflation. In parts of the private sector
wages have fallen by over 10%. Prices fell by 1.2% in July after falling by 2%
in June. Rents are down. Unemployment is 13.7%. Ireland has yet to pull out of
Spain was always a reluctant budget cutter. The government resisted until
outside pressure forced its hand. Its economy is so weak that unemployment
remains over 20%. Public sector wages have been cut by 5%. There are reductions
Many of the austerity measures are yet to hit. It is early days. The stories
about medicines not being available on the state, or of childcare being cut, or
of teacher shortages, are still anecdotal. What is certain is that the public
sector is set to shrink. It is a fair bet that sometime during the autumn some
governments will wobble over their austerity programmes. There may even be
calls for fresh stimuli.
Europe’s bailout packages bought the eurozone time. There is serious work going
on to address the problems. The Task Force on Economic Governance, chaired by
Herman Van Rompuy, is acutely aware that the crisis has not passed. Growth may
ease the stresses and strains, but the big question remains unanswered: how can
countries with such different economies inhabit a monetary but not a fiscal
This is from WRAL.com
“Obama, EU leaders to meet Nov. 20
BRUSSELS — The EU says U.S. President Barack Obama and European Union leaders
will meet on Nov. 20 in Lisbon to discuss how to boost global economic
Obama has urged EU leaders to refrain from pushing through sweeping austerity
plans in a bid not to threaten the economic recovery.
He raised European hackles at the beginning of this year with the announcement
that he would forgo the annual summit meeting planned for May. The move was
seen in Brussels as a diplomatic slap to the 27-nation bloc.”
This seems to contradict the proposition that the USA is managing this EU
crisis for its benefit. Personally I think Paye may be on to something but it
is so far out in left field that it does not correlate to the realities on the
ground. Unless Obama is strictly presenting a snow job, for domestic
consumption, I believe that there is a difference of approaches between the
Germans and the Americans. What we are seeing is a robust Germany seeking to
continue to strengthen its position by forcing austerity in an attempt to keep
the bankers and financial establishments happy. There may be a long term plan
here to unite with China and bring the USA down but at this time it looks more
like the old pattern of everyone for themselves with the international
financial community looking for an opportunity wherever it can be found. I
don’t see the American-German conspiracy, only business as usual in unusual
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