It’s going to be a long, long summer #austerity #Merkel #Greece #Spain

English: Members of the Socialists and Democra...

English: Members of the Socialists and Democrats in the European Parliament protest austerity measures at the Parc du Cinquantenaire in Brussels, Belgium on September 29, 2010. (Photo credit: Wikipedia)

Setback for Merkel as austerity agenda rejected in Germany’s biggest state – Telegraph.

So we’re all setting ourselves up for a long long summer, as the likes of Merkel and Cameron seem to be the only remaining politicians in favour of punitive austerity measures.

Greece will soon be left on it’s own outside of The Euro, the drachma will be brought back, the currency will be devalued, followed by inflation etc etc. After a while the Greek economy will start to recover because tourists will flock there in their droves once again.

France has had enough of austerity measures, Spain and Portugal will soon move that way also.

So how long will we have to wait until the idea of a bad bank in all sovereign states, is finally put into place and interest rates start to edge up?

That way all the toxic assets can be left to our great, great, great, great grandchildren to deal with, and we can start to generate some money back into the economy. The cash strapped consumer can get on with doing what they do best, start spending again, corporates can start employing people again thus reversing the unemployment trend.

For those of you who say that this will drive inflation up, let me tell you that REAL inflation is rife and has been for the past 5-6 years. Fuel bills, food bills, leisure and entertainment costs, private school fees, congestion taxes, tube fares, rail fares etc etc are rampant.

As for Basel III, straight back into the waste paper basket. There isn’t enough money in the world to prevent a systemic collapse of the financial system, you could get to Basel XXX and there still wouldn’t be enough. One thing is for sure, the longer you go on talking about it, the more likely it is to happen.

Somebody also needs to recognise that the drive for efficiency by enforced redundancy needs to change. Corporates need to adapt, CEO’s need to take smaller wages and bonuses, shareholders must accept lower returns and companies need to make smaller profits to drive costs down. The public sector needs to take some responsibility again in providing youth with employment. Otherwise social unrest will rear it’s ugly head again this summer.

Maybe an oversimplification but austerity just isn’t working.


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