Austerity Reigns Over Euro Zone as Crisis Deepens

[TBF]

Do we have any European socialists in our group? Although the article thinks the US is doing a little better (based on bogus employment figures), I tend to think this year may usher in more austerity both in Europe and here. Unless they hold off until after the election of course, I suppose that is possible. Thoughts?

By NELSON D. SCHWARTZ
Published: January 1, 2012

Europe’s leaders braced their nations for a turbulent year, with their beleaguered economies facing a threat on two fronts: widening deficits that force more borrowing but increasing austerity measures that put growth further out of reach.

French President Nicolas Sarkozy will meet on Jan. 9 with German Chancellor Angela Merkel to discuss a new fiscal treaty intended to impose stringent budget requirements on European Union nations.

Saying that Europe was facing its “harshest test in decades,” Chancellor Angela Merkel of Germany warned on New Year’s Eve that “next year will no doubt be more difficult than 2011” — a marked change in tone from a year ago, when she praised Germans for “mastering the crisis as no other nation.”

Her blunt message was echoed in Italy, France and Greece, the epicenter of the debt crisis, where Prime Minister Lucas Papademos asked for resolve in seeing reforms through, “so that the sacrifices we have made up to now won’t be in vain.”

While the economic picture in the United States has brightened recently with more upbeat employment figures, Europe remains mired in a slump. Most economists are forecasting a recession for 2012, which will heighten the pressure governments and financial institutions across the Continent are seeing.

Adding to the gloomy outlook is the prospect of a downgrade in France’s sterling credit rating, a move that analysts say could happen early in the new year and have wide-ranging consequences on efforts to stabilize Europe’s finances. ..

More here: http://www.nytimes.com/2012/01/02/business/global/in-euro-zone-austerity-seems-to-hit-its-limits.html?_r=1&smid=fb-nytimes&WT.mc_id=BU-E-FB-SM-LIN-ARO-010212-NYT-NA&WT.mc_ev=click


Petros Giannakouris/Associated Press
In Athens, homeless people have a New Year’s Day meal. Prime Minister Lucas Papademos has warned of a “very difficult year.”

[socialist_n_TN]

1. My thoughts are the same as they have been for a while..........

The PIIGS countries have to overthrow the capitalists bankers (in deed if not in word) and unite in a bloc with like minded countries WORLDWIDE for support and assistance. Countries like Venezuela, Brazil (?) and others in Latin America could assist Greece or even Italy (which has a more mature and diversified economy than Greece) through the transition. They could survive by bypassing the American and European bankers entirely. I FIRMLY believe this would work and once shown that it works, the rest of the world's people would CLAMOR for this type of international socialist model.

As to the USA and prospects for a "recovery", it will only "recover" on a capitalist playing field. Which means that the jobs that become available will only be low income jobs with few benefits and fewer freedoms economically. The attacks against worker's organizations like unions will only intensify in order to seal these low income, low benefit jobs into place forever (so the capitalists hope). And even this minimal recovery will be contingent on what happens in Europe. IF the Euro and Eurozone collapese, we will head back into a recession here as sure as God made little green apples.

IOW, EVERYTHING is still WAY too uncertain to make predictions based on the capitalist model.

[socialist_n_TN]

2. Just an example to illustrate how the worldwide socialist....

bloc could work in the world of markets today. For illustration purposes only, as I have no idea about the specific economies of these countries. You could ship Italian consumer goods in Greek ships to Venezuela and it all be paid for by Venezuelean oil shipped BACK to the PIIGS countries. Goods for goods trade, thereby bypassing the world's parasites.