Banking and Financial Circuits and the Role of the State
Edited by Louis-Philippe Rochon and Mario Seccareccia
Chapter 13: The end of the innocence: the true nature of the euro crisis, and the alternative based on Minsky’s socialization of the economy and Parguez’s good deficits
Europe is in the middle of an economic and social storm. In the meantime, the world economy is going into a recession that is none other than the manifestation of the deep structural crisis of capitalism. The institutional design of the euro is marked by many contradictions. It is however the global crisis that triggered the European crisis. The European crisis does nothing but react to the world dynamics. In this context, the Eurozone risks imploding. The Greek crisis has been transmitted to Ireland and Portugal – that is, the periphery of the Continent – and now, as expected, it has eventually hit Spain. At that point, suddenly, the crisis has become centred on Italy, with spillover effects on France and even Germany; an acceleration that has been quite unexpected. Germany is sharply awakening from the illusion of a decoupling from European demand. This illusion is, indeed, the only reason that can justify its suicidal policy since 2010, from which however it has had progressively to recede.
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