FACTBOX-Austerity measures around the euro zone | Reuters
I wonder how that is going to play out? And what Americans will do if the same kind of measures are enacted in the USA?
Any informed input from our EU members?
It is 50% media hype spurred on by speculators and right wing politicians who see a political opportunity, and 50% reality. And it is very different depending on the country we are talking about. Dont take the EU in one broad brush on this as the situations are very different in Greece/Ireland vs Denmark/Germany and so on.
European countries have always had high debt vs GDP, it is nothing new. But because of the speculator run on Greece, Spain and Portugal earlier this year and last year, the European government's are scared that it can happen to them, so they "finally" are doing something about the debt situation. This requires balanced budgets as a minimum, which requires income increases or cutting costs. That most countries have right wing governments now days and have had for some time (long before the crisis hit), then they are seeing the opportunity push through partisan political ideas they have been unable to push through because they are highly unpopular policies... now they have the excuse of "omfgs the world is ending if we dont do something" and they are exploiting it to the fullest. Some of the policies I am for, others I am not. For one a drastic cutting before an economic recovery is secure is stupid, and that is what the UK is doing among others. On the flip side, some countries are finally going away from the principle that regardless of your wealth then you are entitled to things like child credits, pensions and so on. Its been a pet peeve for decades that in Denmark for example, a minimum wage family receives a monthly child allowance per child (to its 18th birthday) and as does the richest Danes.. The idea was to help the poor, not the rich. That seems to be changing now, thankfully. I am also for more liberalization in the EU, so business can thrive even more and the consumer will get more choice. Ironically, the present crop of right wing governments might actually put a stopper to this as they cling to protect their business contacts from the wrath of the electorate that blame them for the crisis. But saying that, I am for accountability for those that lead us into this mess, both here in Europe but also in the US.
But dont think for a second that Europe will get rid of its wealth fare state system or UHC.. any politician even remotely suggesting this would be booted out of office faster than Fat Albert eating a pizza. They might tweak it and optimize the systems, but getting rid of them.. never.
But in the end it all depends on which countries we are talking about. Greece is the ****ter as we all know, a self inflicted wound. Ireland is close behind and still is bailing out its banks. But so far the speculators have not targeted Ireland in the same way it did Spain, Greece and Portugal (and still do). At the moment the Irish economy is so bad that they wish they had the economy of Greece almost heh... but no media coverage of that /shrug.
France, Germany, the Scandinavian countries and a few others are doing great with falling unemployment, growth and so on. But that is of course not stopping the austerity wave hitting Europe.
Spain is in a transition period, but the austerity measures are working and should have cut the deficit to 6% by the end of this year.... Ironically enough Spain still has one of the lowest debt vs GDP in Europe and ironically despite the austerity measures last I looked the economy was growing.. very little, but growing. Unemployment is a problem, but it always has been in Spain... even during the good years it was 10%
The UK is going for the double dip thing it seems if the conservative liberal government continues with its plans, but then again with the new polls out they might think again. Newest polls put Labour ahead for the first time in 3 years. Plus the present government is having serious issues internally so one has to wonder how long it will last in its present form.
Italy.. well, it has always been a basket case and Berloscoloony is using this crisis just as Mussolini did with the great depression.. targeting undesirables... hopefully the moron dies of a botox overdoes soon.
Beligum is in as usual political turmoil and it is hurting the country economically.
Holland is going okay as far as I know.. but has a high debt vs GDP ratio.
The Eastern European members are at a so low point in the first place that it was not far to fall, but they are showing signs of recovery as well. Here it is the flat tax countries that are in the biggest problems.
But in the end, over the next 3 years, as I stated France and Germany will have general elections, as well as Denmark, maybe the UK, and many other countries, and chances are very good that the left will take one if not all those elections... we shall see.
As for the US.. I dont think American's have the stomach or the political will to try what the Europeans are doing... When was the last time the US government actually cut spending on anything? Plus the US debt problem is much worse than any country in Europe even Greece.