Thursday, 23 June 2011

The crisis deepens - what's going on?

James Meadway has written a major new analysis of unfolding events in Greece and their broader context. It is appropriately titled 'Greek Crisis: The Four Horsemen of the Acropolis' and looks at the deepening problems for Europe's rulers in this framework:

'We are seeing the outcome of a collision between the collapse of the world financial system in 2008, and the weak Eurozone economy and institutions.

The bankruptcy of Lehman Bros in September 2008 in turn brought banks across the world to their knees. Governments bailed out their stricken financial institutions. Direct injections of cash and promises of support totalled, on IMF estimates, $7trillion globally.

The financial collapse induced a sharp recession that also forced up government borrowing. Unemployment skyrocketed just as tax receipts shrank, resulting in rising public deficits.

The financial crisis was transformed into a crisis of government debt in an effort to limit the damage. But the European financial and monetary systems are too weak to complete this shift successfully. As detailed by the a Research on Money and Finance group, their structural deficiencies are causing the transformation to unravel.'

On the subject of the broader economic crisis since 2008, I recommend watching this interview with David Harvey - at less than 10 minutes it is a concise overview.


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