Ambrose Evans-Pritchard does it again,
signing a most remarkable article in the Telegraph. “Europe clings to
scorched-earth ideology as depression deepens” explains how, “like the generals
of the First World War, Europe’s leaders seem determined to send wave after
wave of their youth into the barbed wire of tight money, bank deleveraging, and
fiscal austerity à l’outrance”.
Excerpts:
“The Eurozone has crashed into double-dip
recessions. …
The North has been engulfed at last in the
contractionary holocaust it imposed on the South. …
The labour share of total income has
fallen to a 60-year low, eating away at demand. This is a formula for
perma-slump. …
Debt dynamics are deteriorating at a
frightening pace across half Europe. …
Europe’s curse is that Germany has a
massively undervalued exchange rate within EMU, and therefore has different
needs, and yet controls the policy levers for everybody. …
A wiser Germany would see that it cannot
force the brunt of adjustment on the South without causing a contractionary
bias to everybody. …
The Latin alliance could force an end to
German-imposed contraction policies at any time … but that would require an entirely new
leadership in France, willing to sacrifice the illusion of Franco-German
condominium and the foreign policy catechism of the last half century. …
Italy faces a slow lingering death.
Citigroup says the economy will contract by 1.2 pc in 2013, and again by 1.5 pc
in 2014, with near zero growth thereafter, endin in debt restructuring anyway.
France will stagnate until 2016.
If this is what lies in store, there is no
further reason to hold EMU together. It should be dismantled in an orderly way
after Christmas before it does any more damage.”
There is much more to read and ponder in
the article. Evans-Pritchard provides examples and data that illustrate his
main points.
The whole article is a must read
here.
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