This is an interesting view from the former Russian Finance Minister published in a major Russian newspaper. Check it out!
Whether it’s Moscow or New York (see my comments today in another blog on a NYT editorial), nobody but Berlin seems to have much confidence in Angela Merkel‘s austerity policies for all – the prescriptive and non-strategic approach to the Euro crisis. Today we have seen news of European unemployment, where Germany benefits at the expense of Mediterranean countries. In the UK, there are increasing concerns for the lost generation.
I have been a keen follower of the news on the Euro crisis and a year ago, criticism was against the speculators, investment banks and hedge funds, who took a punt on bad news getting worse. After the speculators stepped in, we saw strong pressure from credit rating agencies, resulting most recently in wholesale downgrades across Europe. More recently we have seen Nobel economists, the IMF and the World bank all turn against the short-term austerity policies of Angela Merkel. Yesterday, we saw Nobel economist Paul Krugman write on the perils of austerity in Spanish liberal daily, El Pais - the same day it was announced that Spanish unemployment continued to climb, with youth unemployment now just a whisker below a staggering 50%.
Perhaps German austerity policies will be succesful in the long-term but the cost for the youth of Europe will be savage, risking riots, increased criminality and collapse of law and order. The more likely scenario is that Germany’s hardball tactics will push a number of Mediterranean countries over the edge like the example of Argentina which bravely said “enough” to the neoliberal policies of the IMF – in Argentina the middle classes apparently lost nearly everything of value and were reportedly forced to scavenge in dustbins!