Monday, June 6, 2011

How's that Austerity Going?

Time for an update on how austerity efforts are going.

In Greece, a movement of protesters called Indignados has spread from Spain where signs had taunted, "Quiet, we mustn't waken the Greeks". The effect has reportedly been to transform the previously violent protests into more peaceful protests featuring waving of the Greek flag, much discussion of their situation, and a broad variety of Greeks coming together to reject the Euro plan to shove economy-crushing cuts down their collective throats. In addition to the general protesters, Yannis Palaiologos writes that "more than a dozen of the governing party's deputies are openly expressing their reservations about the new measures, while the main opposition party adamantly refuses to lend its support".

In the U.K., a long list of economics/business profs and other notables wrote a collective letter in the Observer saying, "As economists and academics, we know the breakneck deficit-reduction plan, based largely on spending cuts, is self-defeating even on its own terms. It will probably not manage to close the deficit in the planned time frame and the government's strategy is likely to result in a lot more pain and a lot less gain." They also offered up a rough start of a plan B, though the chances of the Cameron govt accepting their plan B seem low.

In Portugal, Bloomburg reports that "Portugal may have followed Greece into recession even before implementing austerity measures demanded for its European Union bailout that are set to further choke the economic growth needed to tame the country’s debt."

In Ireland, Eamon Quinn reports that, "unemployment has soared from 4.4% in 2007 to 14.8% in May." Their main hope for recovery seems to be an exports boom, although that seems unlikely to overcome the impact of severe austerity measures.

As for Spain, per Sylvia Poggoli, "Under international pressure to cut its deficit, the government imposed sharp austerity measures — cutting public service workers' salaries, freezing pensions and drastically reducing public expenditures. The immediate results: a 20 percent drop in consumption and Europe's highest jobless rate, 21 percent." No wonder they have Indignados.

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