Economics / Foreign Policy

As a standalone currency, particular countries’ difficulties with the Euro were foreseeable. But in the wake of the overall global financial crisis, it’s all gone to hell. Is it time to put the euro out of its own misery?

“The best way forward is to jettison the euro and start from scratch. However painful and disruptive that may be, the alternative is infinitely worse. Just look at the way the financial crises have been handled. In every case, the interests of the bankers and bondholders have taken precedent over the interests of the people. And, in every case, the working people have been expected to bear the brunt of the losses in terms of austerity measures. That’s led to the shredding of the social safety net, higher unemployment, and privatizing of public assets. Why? Because policy is dictated by the ECB (European Central Bank), and the ECB’s primary duty is to make sure the banks don’t lose money.”

“If bond prices fall too sharply, so what? The countries effected have to restructure their debts, that’s all. Sure, it’s a painful process, but it’s not the end of the world. In contrast, it WOULD be the end of the world for a lot of the banks, because they don’t have enough capital. That’s why the ECB is intervening, so it can artificially prop up bond prices. It’s basically a subsidy to the banks that’s paid for by the taxpayer. Can you recall a time when the ECB or the Fed ever did the same for ordinary working people? Like with housing?
“No way. The average homeowner took it in the shorts for $8 trillion when the housing bubble burst wiping out most of his savings and leaving the economy high-and-dry. Only the banks get favors.”

http://www.counterpunch.com/whitney08092011.html

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