Angie-nomics in Greece and elsewhere (Updated)

Anthony Faiola reports for the Washington Post In Greece, fears that austerity is killing the economy 01/10/2012. The austerity program that Greece adopted at the insistence of German Chancellor Angela Merkel and the EU is showing definite effects:

Does austerity really work?

Unemployment has surged to 18.8 percent from 13.3 percent only a year ago. Overburdened public hospitals are facing acute shortages of everything from syringes to bandages because of budget cuts, with hiring freezes forcing the mothballing of operating rooms even as more unemployed are relying on the public health system. Rates of homelessness, suicide, crime and HIV cases from intravenous drug use are jumping.

Greece has been forced to cut spending and raise taxes in the middle of a severe downturn, slashing pensions as well as state salaries, jobs and services. As public confidence has evaporated, consumer spending — the biggest driver of the economy — has plunged, generating cascading losses at private firms. The result is a dizzying economic plummet and social crisis that is bringing the cradle of Western civilization to its knees.

“Conditions have deteriorated so dramatically that doctors in this country now believe that the Greek crisis is no longer just a financial crisis but a humanitarian crisis,” said Dimitris Varnavas, the president of the Federation of Greek Hospital Doctors’ Unions. [my emphasis]

But of course Angie and Nick are sympathetic:

On Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy turned up the heat on Greece, suggesting that its bailout deal is in danger of unraveling if Athens does not press ahead quicker with pledged budget reforms and seal a deal with bondholders to voluntarily restructure its massive debt. But they also acknowledged that new steps are needed to combat slowing growth in the euro zone, where economists fear a looming regional recession as other indebted nations from Italy to Spain to Ireland also make deep spending cuts to reassure worried investors.

Or, not.

The EU is also taking action against Hungary, where the current authoritarian government has seriously restricted democratic institutions and rights. The Hungarian uprising of 1956 was one of the signature crises of the Cold War. Many people in Western democracies had a heartfelt sympathy for Hungarians striving for greater democracy and freedom. So it would be awful if the EU, whose purpose is to protect peace and democracy, were to ignore what's happening in Hungary.

And the EU is taking action ... because Hungary is violating Angie's insistence on austerity economics during the depression. Angie and the Angie-fied EU definitely have their priorities. (Staatsdefizit.EU will Ungarn bestrafen Frankfurter Rundschau 12.01.2012) (Update 01/12/2012: See my later post on the action taken mid-week by the EU that does address the democracy issues.)

Jawohl, Herr Monti, you vill do vhat you are told and you vill pretend to like it!

Angie summoned Italian Prime Minister Mario Monti to Berlin for a meeting on Wednesday to receive his latest instructions. Monti is the unelected head of the government installed in Rome at Angie's insistence to act as debt collectors on Italian sovereign debt obligation for the European banks. Robin Alexander writes in Mario Monti wehrt sich gegen Italien-Misstrauen Welt Online 11.01.2012 "Mario Monti ist ein Geschöpf des neuen Merkel-Europas. Ein Politiker, der nie eine Wahl gewann, aber sich ganz der Steigerung der Wettbewerbsfähigkeit seines Landes verschrieben hat." ("Mario Monti is a creation of the new Merkel Europe. A politician who never won an election, but one who is completely committed to the increase of the competitiveness of his country.") Increasing competitiveness is standard neoliberal/Herbert Hooverish talk for cutting back pensions, health care, jobs, unemployment insurance and government services.

But even "a creation of the new Merkel Europe" was publicly grumbling about the need for some kind of economic stimulus in this depression, if only for consumption by his constituency that never elected him back home. (Thomas Schmid, Warum Italien mehr wie Deutschland sein sollte Welt Online 11.01.2012) Angie claimed after their meeting Wednesday that they hadn't argued.

Monti had warned publicly Angie about the problem of austerity measures provoking anti-EU and specifically anti-German sentiments among Italians. Alexander reports that Princess Angie was not pleased. "Diese Drohung hat Merkel nicht gefallen." ("Merkel did not like this pressure.")

Angie hopes to get agreement at the EU summit on January 30 of the EU-minus-Britain group on the treaty language instituting permanent austerity economics she demands that they all pass by the end of March.

Angie is driving the EU toward the cliff with the pedal to the metal.

Tags: angela merkel, eu, euro, european union, greece, italy, mario monti