Eurozone Dystopia

Eurozone Dystopia

Groupthink and Denial on a Grand Scale

William Mitchell

Eurozone Dystopia traces the origin of the Eurozone and shows how the historical Franco-German rivalry combined with the growing dominance of neo-liberal economic thinking to create a monetary system that was deeply flawed and destined to fail. It argues that the political class in Europe is trapped in a destructive groupthink which prevents it from seeing their own policy failures. Millions are unemployed as a result and the member states are caught in a cycle of persistent stagnation and rising social instability.

Chapter 14: The 2003 fiscal crisis

William Mitchell

Subjects: economics and finance, political economy, post-keynesian economics, politics and public policy, european politics and policy, political economy


After years of negotiating the SGP and the Excessive Deficit Procedures (EDP), in particular, trouble emerged for the EMU almost immediately. Given the poorly conceived nature of the SGP it was no surprise that it would fail its first test. What was surprising was the way the politicians and bureaucrats behaved in the face of what any reasonable assessment would consider to be extraordinary hypocrisy. But then, the way Theo Waigel wriggled and squirmed in the ‘convergence period’ with his ‘3 doesn’t mean 3.0’ and the related slippage in allowing Belgium, Italy, and then Greece to enter had already demonstrated how ‘flexible’ Germany would be with its ‘discipline’. The history of the EMU to date has taught us that if Germany is unable to meet rules, then the rules will be altered. Otherwise, the rules will be used as a blunt weapon to devastate the employment base and living standards of weaker nations without the political clout of Germany.

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