Monday, March 26, 2012

The political and economic consequences of a rise in extremism

This is one of the historical issues the European Union and the Eurozone was supposed to prevent from arising again.
It is certainly not the first time in history we see the resurgence of such elements in the midst of severe economic crisis. When a country is pushed to desperation and people lose hope, hate mongers gain ground. However, we need to raise our voices to prevent the Greek Parliament from being infested by extremists. Recent governments have led to the country's economic collapse. Now the people of Greece have to stand up, raise their voices and prevent future governments from destroying the country's moral fiber and tradition of democracy.
Read it at The Huffington Post
Greek Economic Tragedy Brings Neo-Nazis and Racists in the Political Mainstream
Sabby Mionis | Co-chairman, KH Athens; member, KH Endowment and Executive Committees; founder, Capital Management Advisors

Nicholas Sarkozy, losing ground to his left-wing opponent, recently attempted to co-opt the right, also rising in power by offering an anti-immigrant platform for the coming election in which which his poll numbers were dropping. 

The danger is not yet that an extremist right-wing party will gain power but rather that the political discourse and subsequent governance will move in that direction.

That's just politics, right? Not so. The agenda of the extreme right is nationalistic, xenophobic, and abjures international coordination in meeting not only political but also economic issues by cooperating with other than  extremist governments. The is the scenario that presaged WWII and the arms build up before it.

This trend would be poisonous to the only solution to the problems besetting the EZ by going forward toward greater political and economic integration by adopting a common fiscal authority. Lacking that, the other choices are either continuing to punt, which is unsustainable, or else some countries abandoning the euro.

Will this trend end with Greece as the Eurocrats seem to fantasize? Or will the contagion spread to Portugal, Spain, Italy, and Ireland as austerity continues to bite? Or will austerity see the rise of even more extremism in Europe and further unforeseen complications? The current trend is not encouraging.

The Eurocrats that tried to force greater political union economically seem not to have considered the possibility that the EZ was not an optimal currency zone due to asymmetry, and they don't seem to have a viable Plan B to deal with the issues now that they have arisen. Economics and politics are now joining together to complicate the issues and restrict the possibilities.

This is not a trend that is only affecting the EZ. The US has seen the greatest rise in extremist groups in recent history since the election of President Obama, no doubt due in part to the economic background against which this is taking place.

1 comment:

Ryan Harris said...

A political corollary to the Mosler contagious default scenario...