The Club Med and the euro

Workers of Europe, protest!

A wave of strikes and demonstrations shows the pain across the region

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The misadventure of the Italian workers caught in their transition to retirement by a drastic reform (the so called "esodati") is an example of how socially sensitive matters should not be managed.
The first measure of the newly appointed “technical” Government in November 2011 to face the economic crisis was a deep review of the rules for retirement from work; the retirement age was suddenly raised of many years and the requisites for achievement of retirement were made much more rigid, although the Italian retirement system was already well balanced financially and widely acknowledged as sustainable in the mid term.
A big trouble soon emerged for the many on-going transitions to retirement, already started in accordance with the current rules, which were not treated suitably in the reform (actually they were completely overlooked by the Ministry of Welfare) so many citizens were caught in the middle of the irreversible process and left without both salary and retirement check for many years, suddenly facing poverty.
The Ministry of Welfare admitted the mistake and granted the exemption from the effects of the reform to the 120.000 workers closer to the age of retirement, but did not solve the problem for the others, whose number is about 270.000.
The Government even opposed the initiatives of the Parliament to settle the question, both openly and actually denying access to the official data needed to produce a new law; this was an unprecedented case of lack of cooperation between the highest National Institutions.
It really seems that 270.000 families in despair due to a mistake of the Ministry of Welfare (!) are not a significant and urgent issue for the Italian Government.

Jim Bullis

The discussion fails to note that 'rising net exports' could just as well be described as 'falling net imports'. Austerity can accomplish such a condition without there being any increase in productivity. If governments take pride in that, we should be worried.

A natural balance of trade might be where this is all headed, where things will settle out with European workers being paid on a par with Chinese workers. Maybe we should be surprised that economists did not see this coming as the world transitioned to a free trade system.

The only way we in the USA can escape a similar outcome is if we utilize our potential agricultural productivity to provide exports to balance our imports. Europe is not as fortunate as we are in having vast under-used land to transform into a basis of real productivity.

The article also seems to confuse service enterprises as productivity enterprises because they seem to show job creation. Remember, delivering pizza and washing each others cars makes a Voodoo economy.

nuno nobre

People are on the streets because we are assisting the destruction of our countries, especially in Portugal. Our main problem here is the lack of justice. I don’t blame Merkel our Germany for our problems, although their main goal is to make money, not solidarity. Germany is profiting 1.9 million euros a day with our crisis. But, as they say, what goes around comes around and for Germany, the crisis is just around the corner. We need serious structural changes and reforms, but nothing will change if we continue to vote for the same idiots. There is no equity in Portugal. Just today the PM office released a press release where all the "party boys" are going to receive their wages without cuts. All of our politicians are corrupt and mesmerized with power and austerity. As for IMF, they represent the interests of the multinational corporations that own the world, so therefore the internationalization of incompetence and greed. The problem is not just Portugal. Look at our so called European leaders - Mario Draghi (ECB), Mario Monti (Italian PM), Von Rompel (don’t know what the hell he does) and Durão Barroso, yes the one responsible for abandoning Portugal during a critical period of our so called democracy, and for the Iraq war summit in Azores along with Blair Bush and Aznar. We have to change our ways of living, but not with these austerity measures that are destroying what is left of our economy. I also think that Europe will only survive with strong leaders, with no lobbies to sustain and, above all, courage, to face other threats, such as the international markets. This so called European crisis was caused by the 2008 subprime crisis in the United States, which sent them back 700 billion euros. So in order to cut down on their losses they turned to Europe. Their goal is to buy all of our strategic areas and businesses. In Portugal we sold, for a very low market price, PT (communications), TAP (airlines), EDP (energy) and they also want our public bank (CGD). PORTUGAL and SOUTHERN EUROPEAN COUNTRIES are on SALE, with large discounts. At this moment there is no light at the end of the tunnel, not with these career politicians, puppets of the financial and economic markets. EUROPE is NOW OWNED BY WOLVES and GOVERNED BY PIGS. Thank you economist for this article. Here in Portugal our media is owned by ex-politicians with a private agenda, and our main opinion makers are politicians responsible for the situation we are in, a total disaster. Their the ones blaming Merkel and Germany for the problems that they caused.

la.výritý in reply to nuno nobre

Could you please elaborate in which way "Germany", which is in fact the German taxpayer, is "profiting 1.9 million euros a day with your crisis"! Especially elaborate in which way only Germany is profiting and nobody else. So far the German taxpayer paid or guaranteed almost 1 trillion euros "on your crisis", this is a provable fact!

Your post, dear commenter, is otherwise pure racist anti-German propaganda!

nuno nobre in reply to la.výritý

As I said before, if you know how to read, I dont blame Germany for our mistakes. What I criticize is the fact that there is no solidariety between European countries, especially Germany. How can you accuse me of simple rascist anti-German propaganda? My country as never responsible for the deaths of millions of people, or resposible for not one but two world wars. At the most european countries helped Germany rise from the ruins.

nuno nobre in reply to la.výritý


la.výritý in reply to nuno nobre

If you don't blame Germany, why then, singling it out?

Furthermore: We should not have lost sight of the fact that Germany is the only sizable economy left in the eurozone still having a relatively good credit rating. Any move in the wrong direction will jeopardize this too. Who, then, will stand up for the rest? The lame can't carry the paralyzed.

So far, the German taxpayer is committed with approx the sum of one trillion euros toward the eurozone's indebted nations (via direct bailout, EFSF*, ECB and TARGET2). Any more might tip 'the ship' over; after all, the German government holds, in the first instance, responsibility toward its own citizens. This is what the inauguration oath and German law requires.

Plus, I'm not German, but I would be quite offended if someone tried to practice ugly kin liability against me in such racist way you just did. Why should, in this case, a German feel any sympathy for you?

*Starting in 2013, the EFSF will be replaced by the ESM.

nuno nobre in reply to la.výritý

They don’t feel sympathy for us. Never did, never will. I just don’t understand why you are calling me a racist. Germany will only lend money to other community members, if they can get something out of it. Or am I wrong? Their lending us, poor countries, money because it is in their best interest. The end of the EC or withdraw of a country would dictate the end of this so called Europe, and Germany would suffer dearly from this collapse. The threat is from abroad, and we are losing time fighting each other. The dollar is the main threat, all caused by the 2008 subprime crisis. And remember what goes around comes around, and sooner or later it will bite you on your ass. European efforts should go towards fighting the greed of the international markets, back up by these so called rating agencies. Where were they when AIG declares bankruptcy. Moodys and S&P had them on a AAA+ scale. Take a look at the United States public debt, and tell me that this is not an attack at the Euro zone and its members. Of course it will start with the most fragile countries, but sooner or later France and Germany will be affected, and then it will be too late to do something about it. In Portugal, these austerity measures are not working. I don’t want or need anybody’s sympathy. I guess you don’t mind being a hostage of the international and financial markets, but I do.

la.výritý in reply to nuno nobre

It is racism in its purest form trying to make people feel bad (or guilty) because of their race or nationality, for events that happened before their times.

If you are really Portuguese, how would you feel if someone today would try to implement a guilt complex into you and your generation about Portugal's colonial past. As far as I am aware, young Portuguese are even 'proud' of it.

What would such young Portuguese say if a foreigner would point steadily to the fact that the Portuguese were the first to engage in the New World slave trade, considering humans "as cargo", to be transported to the Americas as quickly and cheaply as possible, willingly accepting the death of up to 70% of this "human cargo" on the way, and then the barely-alive remaining "cargo" being sold for slave labor in coffee, tobacco, cocoa, cotton and sugar plantations, gold and silver mines, rice fields, construction industry, cutting timber for ships, and as house- and sex slaves.

Yes, if the now living German generation 'needs' to feel guilty about long gone events of which it wasn't part, then surely you - if you are really Portuguese, which I substantiated doubt - feel guilty about your nation's past as well, right?

This likewise applies to all the other slave trading nations: the British, the French, the Spanish, the Dutch, and even the Caucasian Americans. They all had established outposts on the African coast where they purchased slaves from local slave hunters.

Current estimates are that about 12 million were shipped across the Atlantic (although the actual number purchased by the slave traders is considerably higher) of which up to 60 percent died a horrible death during the transport.

Why don't you ask the now living British, the French, the Spanish, the Dutch or the Americans if they feel "responsible for the deaths of millions of people", or responsible for enslaving a sizable part of the world's population?

Wonder what the would answer to such dimwitted chutzpah.

la.výritý in reply to nuno nobre

Not only Germany, each nation has, first of all, to look after its own well-being, also the stronger ones.
You know, on air-flights there’s the safety warning before take-off: Put the oxygen mask on yourself first – THEN you can help others. Because, duh, if you’re not breathing anymore, you’re not going to be helpful to others!
Yet many people, as in some EZ countries, think when something really bad happens in their life - like this crisis - that it’s the Strong's duty to help everyone else and put himself last, as if this incurs some sort of divine duty or something. Or they are expected to put on a happy face, or “be helping the family” or whatever other nonsense we tell one another.
The 'Strong' putting the oxygen mask on himself first is LOGICAL. It’s a great metaphor for taking care of oneself . . . AND others – for two reasons: First, if he falls apart too, he becomes the burden of the actual weaker ones; and second – he can’t contribute his strength, his talent, his intelligence, his creativity or common destiny to the world if he's gasping for air himself.
Most Germans are aware of this wisdom.

nuno nobre in reply to la.výritý

Do you really think young Portuguese or even older generations approve of what our ancestors did in the past? Have you been to Portugal and talked to young people? Yes our past is dark, just like the rest of the humanity's past, and those were mistakes that we should have learned from, but no, apparently history has nothing to teach us. And yes I’m Portuguese, and very proud of it, and to tell you the truth, I don’t really care where you are from. Who’s being a racist know, accusing our youth of being proud of our colonial past? In part we are paying for our mistakes committed in the past, especially in the last 35 years, when our corrupt and incompetent politicians didn’t know how to negotiate more favorable conditions for our economy. One of them is now our “beloved” President. This European project is a flop in every way, and the only way to survive is to become a Federation of Countries, just like the United States, but there are various barriers that have to be lifted – culture, language, heritage, and race and specially economic and financial discipline, something that Germans should be proud of. However, there can only be change, if run out of office these corrupt politicians, idiots like Durão Barroso. I’m ashamed of having these kinds of individuals representing my country and EC.


Spain has two serious problems:
-Spanish socialist party and left-linked trade unions do not accept
the defeat suffered in the elections year ago and they will do everthing in their power to jeopardize Spanish economic recovery,
hoping that this way the centre-right government will fall and they
will come back to power.
-Separatist tendencies en Catalonia and Basque country.
In the local elections in Catalonia on 25th November, the most likely result is a 2/3 majority of the parties advocating for
Catalonian independence.
Even unilateral declaration of independence by new Catalan parliament cannot be excluded.
Sooner or later and rather sooner than later, the Basque
nacionalist, having also 2/3 majority in the local parliament,
will challenge the central government with independence claim.
There is a risk that it might be two much of a challenge for
Spain as a Nation-State.

A J Maher

"The streets are full of protesters, but what are the protests? They are against economic hardship. They are for... what, exactly?"

They are for the idea that private losses should not be socialised. That bondholders must suffer the consequences of the feckless lending decisions of their agents. They are for the idea that the economy exists to enhance public welfare not protect rent seekers.

That sort of thing........

la.výritý in reply to A J Maher

They should be "for the idea that private losses should not be socialised." They should demand "that bondholders must suffer the consequences of the feckless lending decisions of their agents."

The term "public rent seekers" isn't even part of their vocabulary. All they are demonstrating for is, quite lopsidedly, "to enhance public welfare". Such single-sided demands persuaded ruthless (or corrupted) politician to spend assets which aren't even produced yet. Thus, they were all 'happily' living at the expense of the future generations. This is not democracy but 'perversocrazy'.

not protect rent seekers.


The streets are full of protesters, but what are the protests? They are against economic hardship. They are for... what, exactly? A resumption of everyone believing that magically you can have high state spending coupled to job-destroying labor law rigidity and that the Germans will keep on paying for everything? Unemployment is hateful, but fantasy is more hateful still. It really is time for protesters to stop blaming others and start thinking about how to get things moving on a micro scale. If impoverished villagers in Bangladesh can carve improvements out of their very unpromising situation, surely the pampered citizens of the West can at least make some modest attempt to improve their own lives without forever assuming the Big Mummy of government should do it all for them?

erniejpdx in reply to CA-Oxonian

"Big Mummy." I like that. Taking it in another sense of the word, too many modern governments are indeed mummy-like: immobile, anchored in the past, containing too many dead elements, wrapped up in themselves, and whose visions of the future are as impenetrable as bitumen....



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