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April 21, 2014 / 21 Nisan, 5774
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Posts Tagged ‘peter martino’

Europe’s Wrongheaded Austerity Policies

Tuesday, May 22nd, 2012

Austerity — what governments are currently experiencing in Europe – can be a bad thing. It is a well-known basic economic theory that when politicians try to slash the government budget by taxing citizens rather than by cutting government expenditure, they only harm the economy, which results in less tax income and worsens the situation. In the early 1970s, economist Arthur Laffer visualized it by drawing a curve on a napkin, indicating that from a certain point on, higher taxes result in less government income. When taxes are raised even further, the economy begins to contract.

A typical example can currently be seen in the Netherlands. The country’s economy has not grown in the last three quarters. Pressured by the European Union, austerity policies were introduced in 2010. Last April, the government fell when the Freedom Party of Geert Wilders refused to back a new austerity package of €11.5 billion, of which only €4 billion was to come from cutting expenditures and €7.5 billion was expected to come from raising taxes. The new austerity round was nevertheless imposed by the EU, which insisted that the Netherlands trim its budget deficit to 3% of BBP in 2013. Geert Wilders was right to have refused to go along with the latest plans. Not only will the amount of €7.5 billion in new taxes in all likelihood not be reached, but the Dutch economy will be hampered even more.

Last January, Standard & Poor’s warned the Netherlands that its credit rating could be lowered if its growth kept declining. S&P warned that the Dutch austerity policies risked “becoming self-defeating, as domestic demands fall in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.”

Geert Wilders’ party is expected to do well in next September’s general elections. The electorate agrees with his rejection of the austerity package. Like Mr. Wilders, it blames the EU authorities in Brussels for imposing these policies on the Netherlands.

The same phenomenon can be seen all over Europe, with electorates in revolt against EU-imposed austerity everywhere. The rising unpopularity of governments that are trying to cut back their deficits has worried the IMF. Earlier this month, IMF Managing Director Christine Lagarde said that the IMF is aware that fiscal austerity holds back growth and that the effects are worse in an economic downturn. This is, however, only a half-truth. As no one, not even the state, can indefinitely continue to spend more money than he receives, cutting government expenditure – hence austerity – is badly needed. The problem is that the austerity policies are targeting not the institution which is living beyond its means — namely the government — but the taxpayers. As Europeans are already suffering tax levels that are almost twice as high as those in the U.S., it is only natural that the voters are in revolt.

The irony is that the austerity policies of the past years have been imposed at the behest of the unelected liberal, leftist authorities in Brussels on center-right governments in the EU member states. The electorates are punishing their center-right governments by voting in center-left politicians who promise to end the austerity policies and “tax the rich” — a course that will make matters even worse.

The Dutch are lucky to have Geert Wilders; but the French, who lack an equivalent of Mr. Wilders, quite understandably voted President Nicolas Sarkozy out because they disagreed with his austerity policy. However, they voted the Socialist François Hollande in, who will undoubtedly only heighten the problem.

The same phenomenon can be witnessed in the United Kingdom. Two years ago, the Conservative David Cameron managed to oust Labour. Today, polls predict that if elections were to be held now, Labour would beat the Conservatives with a margin of 10%. David Cameron is fortunate that Labour leader Ed Miliband is unpopular or the margin might be even larger.

What did Cameron do wrong? He, too, made tax payers pay for austerity. One of the first things Mr. Cameron did was to raise Britain’s top tax rate to 50%. The result was that the tax revenue from Britain’s highest income group fell. Another thing Cameron did was to raise sales taxes. VAT – or Value Added Tax – rose from 17.5 to 20%, the highest level ever, as part of Cameron’s effort to bring down the country’s budget deficit.

Who Will Suffer As A Result of Euro Policies? The Jews.

Monday, May 14th, 2012

The European Union, and especially its common currency, the euro, is on the brink of collapse. The Greeks, unable to form a government after the May 6 elections, will have to go to the polls again next month. In Germany, Chancellor Angela Merkel is rapidly losing support. If she cares about her reelection next year, she had better push Greece out of the eurozone rather than keep that country afloat with German taxpayers’ money. If Greece leaves, the whole euro edifice might come down – a better outcome than the present situation, in which extremist parties on the Left and the Right (all of them anti-Semitic) are rapidly gaining electoral support at the expense of mainstream parties which keep clinging to the failed project of the common European currency.

A recent program on German television revealed that former German Chancellor Kohl had exchanged the strong D-mark for the crisis-prone euro because he wanted to atone for Germany’s role in the Second World War. Contemporary Germans, however, are not inclined to pay for the Greeks and other southern Europeans to make up for their grandfathers’ role in the Second World War.

The euro project was flawed from the beginning. It lumped various countries with widely divergent economies, cultures, and languages together in a single monetary union, imposing a “one size fits none” monetary policy on 17 countries which have little in common but the fact that they are all located on the European continent. It is as if the U.S. were to renounce the dollar for the ‘amro,’ a common currency with countries as different as Mexico, Colombia, Brazil, and Argentina.

In this fashion, a prosperous and industrious northern European country such as Germany, the economic powerhouse of Europe, renounced the D-mark for a euro, which also included a nation such as Greece, where corrupt politicians lied and cheated about the country’s dire economic situation.

A documentary on German television last week revealed that the political class in Europe knew that the Greeks were cooking the books, but did not care. The euro was a political project. Former European Commissioner Frits Bolkestein admitted as much in the documentary. Former German Chancellor Helmut Kohl renounced the D-mark for a euro which was to include as many countries as possible. “Kohl was a romantic as far as the EU was concerned,” Bolkestein said. “For Kohl, European unification was the way for Germany to atone for the Second World War. That is why he wanted to have as many countries in the eurozone as possible, whether they qualified or not.”

Bolkestein admitted that he had misgivings about the inclusion of countries such as Greece in the eurozone. In the same documentary, Jean-Claude Trichet, president of the European Central Bank from 2003 to 2011, admitted that the financial crisis in Greece, which is currently dragging the euro down with it, could only have happened because the EU refused to see the obvious. It was an eye-opening documentary that enraged many Germans viewers.

The euro crisis is leading to a general dissatisfaction of the Europeans with the governing political class, whether left, the right, or center. In less than one and a half years, 10 of the 17 government leaders of the eurozone have been brought down or voted out of office. This happened in February 2011 to Ireland’s centrist Prime Minister Brian Cowen; in April 2011 to Finland’s centrist Prime Minister Mari Kiviniemi; in June 2011 to Portugal’s socialist Prime Minister Jose Socrates; in September 2011 to Slovenia’s socialist Prime Minister Borut Pahor; in October 2011 to Slovakia’s center-right Prime Minister Iveta Radicova; in November 2011 to Italy’s center-right Prime Minister Silvio Berlusconi, Greece’s socialist Prime Minister George Papandreou and Spain’s socialist Prime Minister Jose Zapatero; in April 2012 to the Netherlands’ center-right Prime Minister Mark Rutte; in May 2012 to France’s center-right President Nicolas Sarkozy.

All ten of them fell — directly or indirectly — as a result of the eurocrisis. It is generally expected that the same fate will befall Germany’s center-right Chancellor Angela Merkel in next year’s German general elections. Merkel is Helmut Kohl’s successor as leader of the Christian-Democrat Party CDU. In last Sunday’s state elections in North Rhine-Westphalia (NRW), Germany’s most populous state, where almost a quarter of all Germans live, the CDU lost its position as the biggest party in the state to the Socialists. The CDU lost a quarter of its votes, while the Pirate Party, some of whose leaders acknowledge that the party is infiltrated by neo-Nazis, entered the NRW state parliament.

The largest European countries – Germany, France and Italy – which were (or, in Germany’s case, are) led by center-right politicians, are shifting to the left. In countries where the left has lost the leadership, the extreme-left won significantly in the elections.

Printed from: http://www.jewishpress.com/indepth/analysis/who-will-suffer-as-a-result-of-euro-policies-the-jews/2012/05/14/

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