100 Italian economist publish letter warning about austerity

ash28

From Ambrose Pritchard Evans blog:

The rebellion against the 1930s fiscal and monetary policies of the Euro-complex is gathering pace.
Il Sole has published a letter by 100 Italian economists warning that the austerity strategy imposed by Brussels/Frankfurt risks tipping Europe into a self-feeding downward spiral. Far from holding the eurozone together, it will cause weaker countries to be catapulted out of EMU. Others will leave in order to restore sovereign control over their central banks and unemployment policies.
At worst it will blow the EU apart, leading to the very acrimony that the European Project was supposed to prevent.

My rough translation:
“The grave economic global crisis, and its links to the eurozone crisis, will not be resolved by cutting salaries, pensions, the welfare state, education, research …….. More likely, the `politics of sacrifice’ in Italy and in Europe runs the risk of accentuating the crisis in the end, causing a faster rise in unemployment, of insolvencies and company failures, and could at a certain point compel some countries to leave monetary union.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100006271/the-euro-mutiny-begins/

I looked at the article in Il Sole but my Italian isn't too great (it's rubbish) - but it looks like there could be trouble ahead.....

In fact some what they are saying seems to mirror some opinions in the UK.

brit1234

Recessions are good for purging inefficient and non productive waste. Measures that delay recessions make the next recession harsher.

Burn the keynesian filth.

http://www.youtube.com/watch?v=A_sY2rjxq6M

Wookster

This only hastens the next crisis.

Utterly disconnected from reality.

lostinrates

ash28 wrote: »

but my Italian isn't too great (it's rubbish) -.

Mine's not too hot but I was going to translate it, then saw the length of it.....sorry, I'm just not gonna do it...when you go to where it says the piece continues below you realise the above was the tip of the iceberg!

FATBALLZ

How did we get out of it last time we were in this much debt? Did we spend more or cut back?

Rochdale_Pioneers

FATBALLZ wrote: »

How did we get out of it last time we were in this much debt? Did we spend more or cut back?

We grew the economy. Last recession we were able to that a bit easier as the rest of Europe wasn't in recession. This time we're stuck with our trading partners also in the mire - we need to buy stuff from each other to keep the economy moving. OR we can all cut together and have low debt but no economic activity.

Thrugelmir

FATBALLZ wrote: »

How did we get out of it last time we were in this much debt? Did we spend more or cut back?

We've never had a problem of this scale to resolve.

Bullfighter

Rochdale_Pioneers wrote: »

We grew the economy. Last recession we were able to that a bit easier as the rest of Europe wasn't in recession. This time we're stuck with our trading partners also in the mire - we need to buy stuff from each other to keep the economy moving. OR we can all cut together and have low debt but no economic activity.

Or we could have just let the risk takers fail, rip the plaster off and purge the system.

This time is completely different. The global ponzi scheme of credit creation is coming to an end, and we don't have cheap natural resources to rebuild the system.

Every country wants to be the last man standing.

Spartacus_Mills

Rochdale_Pioneers wrote: »

We grew the economy. Last recession we were able to that a bit easier as the rest of Europe wasn't in recession. This time we're stuck with our trading partners also in the mire - we need to buy stuff from each other to keep the economy moving. OR we can all cut together and have low debt but no economic activity.

The last recession was caused by an oil price shock rather than an incompetent government (although Lawsons giveaway budget did not help). However we also had a situation where the John Major government raised taxes and increased public spending on infrastructure projects in the UK. We do not have the luxury of increasing public spending as it is far too high currently.

It is too simplistic to say we got out of recession through trading.

Not all of our trading partners are in the mire. Some of them are.

Our level of debt and deficit is unsustainable. Something has to be done about it.

Generali

Rochdale_Pioneers wrote: »

We grew the economy. Last recession we were able to that a bit easier as the rest of Europe wasn't in recession. This time we're stuck with our trading partners also in the mire - we need to buy stuff from each other to keep the economy moving. OR we can all cut together and have low debt but no economic activity.

The UK's national debt was approximately 40% of GDP at the end of the last post-recessionary period (1995). Between 1990 and 1995, the national debt rose from about 35% of GDP to 40% of GDP or by 5% of GDP.

The UK's national debt is currently 53.5% of GDP and from New Year's Day 2010 until the day of the General Election the National Debt rose by an equivalent amount.

Much of the world experienced either reduced economic growth or recession in the early part of the 1990s.

It's hard to find any parts of the above that are accurate.

FATBALLZ

Thrugelmir wrote: »

We've never had a problem of this scale to resolve.

Not even at the end of WWII?