Europe’s debt-crisis strategy is near collapse. The
long-awaited recovery has failed to take wing. Debt ratios across southern
Europe are rising at an accelerating pace. Political consent for extreme
austerity is breaking down in almost every EMU crisis state. And now the US
Federal Reserve has inflicted a full-blown credit shock for good measure.
None of Euroland’s key actors seems willing to admit that
the current strategy is untenable. They hope to paper over the cracks until the
German elections in September, as if that is going to make any difference.
A leaked report from the European Commission confirms that
Greece will miss its austerity targets yet again by a wide margin. It alleges
that Greece lacks the “willingness and capacity” to collect taxes. In fact,
Athens is missing targets because the economy is still in freefall and that is
because of austerity overkill. The Greek think-tank IOBE expects GDP to fall
5pc this year. It has told journalists privately that the final figure may be
-7pc. The Greek stabilisation is a mirage.
No comments:
Post a Comment