Monday, January 02, 2012

While the EU fiddles, democracy in Hungary ...

"When the question is asked, when did Hungary devolve into a one party state from a multiparty democracy, the answer is now." - Marc Chandler (of Brown Brothers Harriman), A Quiet Putsch in Hungary? Credit Writedowns 01/02/2012

It was once conventional wisdom that a depression on the scale of the Great Depression could create favorable conditions for overthrowing democracies.

Like the self-destructive effects of austerity economics in a depression, that lesson doesn't seem to have sustained itself very well into the current depression.

The European Union, which was designed to be a bulwark of democracy, is obsessing over the sovereign debt crisis which the incompetence of the EU's main leaders (Angela Merkel in Germany, Nicolas Sarkozy in France, David Cameron in Britain) have made far worse with their frivolous non-solutions focused on implementing Herbert Hoover economics.

They are concerned, however, from Hungary's departure from bankster orthodoxy on the governance of their central bank, which Chandler also describes.

Angie's arrogant insistence on replacing the governments of Italy and Greece with debt-collection regimes in itself is badly damaging to democracy. The EU itself has overridden democratic institutions in those two countries by those actions. They are scarcely in a position to take a strong stand against authoritarianism in Hungary when they are focused on giving private banks' profits priority over democracy in the eurozone.

The new conservative government in Spain had promised not to raise taxes. Within a few days of taking office, they had to reverse that promise and propose tax increases. The International Monetary Fund (IMF) and Angie were in agreement this had to be done. So the Machtwort came from Berlin, "Yes, you vill raise ze taxes."

There is an EU summit coming up at the end of this month, at which Angie is scheduled to present the language of the treaty changes she's demanding. The proposals would essentially give the EU (read: Germany) the final say over national budgets, much as Angie is now exercising informally with Spain. It's hard to imagine that it will fly. It won't do anything to save the euro as long as Germany is dictating austerity budgets during a depression. We'll see over the next couple of months.

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