First, there was the credit crunch, and governments around the world stepped in to bail out the banks. The sequel to that debacle is the sovereign debt crisis, which has hit the eurozone hard. The hour has come to pay the piper, and ordinary citizens across Europe are growing to realize that socialism for the wealthy means punching a few new holes in their already-tightened belts.
Building on his work as a leading member of the renowned Research on Money and Finance group, Costas Lapavitsas argues that European austerity is counterproductive. Cutbacks in public spending will mean a longer, deeper recession, worsen the burden of debt, further imperil banks, and may soon spell the end of monetary union itself.
Crisis in the Eurozone charts a cautious path between political economy and radical economics to envisage a restructuring reliant on the forces of organized labour and civil society. The clear-headed rationalism at the heart of this book conveys a controversial message, unwelcome in many quarters but soon to be echoed across the continent: impoverished states have to quit the euro and cut their losses or worse hardship will ensue.
The second Ιnternational Conference of EReNSEP (The European Research Network on Social and Economic Policy), "France and Europe after Brexit", was held in Paris December 2-3, 2016. Videos from the event — including presentations by Costas Lapavitsas, Heiner Flassbeck, Stathis Kouvelakis, and Cédric Durand — are available on YouTube.
The collective statement below was drafted following the conference, and signed by 25 academics, writers, and politicians.
via Wikimedia Commons.
These are critical moments for Europe. It is clear that the Economic and Monetary Union has irrevocably failed, the economies of the periphery of Europe remain in severe crisis, and the economies of the core lack any impetus. The single currency has become a tool for Germany to implement mercantilism through wage dumping and — with the support of other core economies of the EMU — to dictate “structural reforms," which create economic stagnation, poverty, and unemployment. The big corporations and promoters of neoliberalism are taking advantage of the crisis to intensify their offensive against the social and democratic conquests of the twentieth century.
First published on the blog of the Centre de recherche en Économie at Sciences Po. Translated by David Broder.
Upon its introduction at the turn of the millennium, the euro was widely perceived as a major achievement for Europe. Its apparent economic success, combined with the convergence of multiple economic indicators across the various countries, fed this feeling of success. A few years later, the picture looks radically different. The global financial crisis has revealed the imbalances that led to the sovereign debt crisis and which have driven the Eurozone to the brink of breaking apart. The austerity policies that became a continent-wide norm in 2011 have fuelled a long stagnation [See the reports of the independent Annual Growth Survey (iAGS)], with growth rates paling in comparison to those of the United States and the United Kingdom.
This economic under-performance has fed popular resentment against the euro, with a growing number of Europeans today considering it the problem rather than the solution. The financial community itself seems to be preparing for the possibility of leaving or dissolving the single currency, by reducing its cross-border exposure. Greece came close to breaking away in 2015. Finally, the intellectual atmosphere has also changed: leading thinkers like the American economist Joseph Stiglitz and the German sociologist Wolfgang Streeck are but the most visible representatives of a more generalised change in attitudes.
25 researchers and political organisers from France, Greece, Spain, Germany, Italy and Belgium have put their names to this collective text, following the international conference France and Europe after Brexit. The conference was staged in Paris on 2 and 3 December 2016 by the Europe-wide EReNSEP network. Translated by David Broder.
Europe has entered a critical period. It is evident that the Economic and Monetary Union (EMU) has irrevocably failed. The economies on the periphery are suffering severe crisis, and the economies of the centre are stagnating. The single currency has become an instrument of German capitalism as it seeks to impose a mercantilist economic policy through wage dumping as well as to dictate "structural reforms" (and it is supported, in this, by the other economies at the centre of the EMU).