Eurozone Dystopia
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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.
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Chapter 13: The first few years: smug self-congratulation and mass delusion

William Mitchell


Stage III of the EMU transition covered the period from 1 January 1999 to 1 July 2002, the latter date marking the end of the national currencies. While the convergence process was farcical at best, it remained the case the nations could only ‘gild the lily’ so far, notwithstanding the amazing scam that Goldman Sachs helped the Greeks to perpetrate in 2001, which facilitated that nation’s entry. In other words, the convergence exercise, while fraudulent, still caused considerable self-inflicted damage as the nations imposed fiscal austerity and growth rates fell sharply. Table 13.1 compares the average annual percentage economic growth rates for the decades from 1970, with the last period being 2000 to 2013. The convergence period was clearly damaging for the large European economies (France, Germany, and Italy), which make up more than 60 per cent of the overall EMU economy. While Ireland was becoming the ‘Celtic Tiger’ in the early years and the ‘darling’ of the conservatives, it was also on its way to becoming the mangy cat that it is now.

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