Bill Mitchell — Eurozone unemployment – little to do with international competitiveness

The so-called ‘Informal European Council’ released a document on February 12, 2015 – Preparing for Next Steps on Better Economic Governance in the Euro Area: Analytical Note – which has been used as a background paper to batter the Greeks into submission in the latest round of the Eurozone crisis. It was published under the authorshop of Jean-Claude Juncker (President of the European Commission) with “close cooperation” with Donald Tusk (President of the European Council), Jeroen Dijsselbloem (President of the Eurogroup of Finance Ministers) and Mario Draghi (ECB boss). All that is missing is the Madame from the IMF to complete the Troika. This is a very dishonest document, deliberately framed to advance the austerity agenda and damage the living standards of some of the nations within the monetary union. It is hard how any serious economist would put their name to this sort of analysis.....

Well, we know that these people are not serious economists but serious politicians flogging an ideology they can't admit has resulted in failure. Perhaps, Christine LaGrande's signature isn't on this because she recognizes it. But if she doesn't speak up, silence is consent.

The Eurozone is now locked down in a straitjacket of economic austerity, driven by an economic ideology that is blind to the evidence of its own failure.

The concern:

The Keynesian era emerged out of the Great Depression, which taught politicians that without major government intervention, capitalism is inherently unstable and prone to delivering lengthy periods of unemployment.
Full employment came only with the onset of World War II as governments used deficit spending to prosecute the war effort.

Failing to recognize this and imposing fiscal austerity in the face of economic and financial crisis that is morphing into social unrest and political crisis, Europe is now sliding into instability and toward war, with a hot war raging on its eastern border with Russia. Is history rhyming? How many times do we have to run this?

Bill runs through the history.

Bill Mitchell – billy blog
Eurozone unemployment – little to do with international competitiveness
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia