Double dip recession is the most frequent phrase I usually encounter while reading news. The stories developing in Europe are boring. Greece default, Greece default, Greece default and the need of contagion! It shouldn’t have made any headlines.
In last article, I suggest only a new bold action will solve the crises in Eurozone. I was puzzled by the ways Europe deals with global economic crisis. I recently heard of some proposed solutions to deal with the crisis in Eurozone, the introduction and/or another bailout.
Bailout has been a self-defeating strategy. I bet Eurobond won’t also work if Germany doesn’t in a position to help. I was shocked in 2008 once I learnt most countries in Europe chose to implement contractionary monetary policy. I’m convinced they will spend back at some day or the crises won’t be solved. They robbed their own people and will spend on right things to boost growth.
Actually, France and Britain have spent more already in the form of military intervention in Libya dubbed as Military Keynesians. Some friends asked me why Europe experienced anemic economic recovery. The strategies countries in Europe implementing are not supporting growth. The growth was mainly driven by inventory investment. A new bold action is needed. The card is now on Germany. No one can help Europe. I don’t think China is going to buy a large of amount of Europe’s debts. BRICS as a whole will also buy a small amount of debts too. It’s just a symbolic gesture.
More and more people are thinking the next recession is just around the corner. It’s regrettable that can’t avoid the avoidable crisis in 2008. Bailout is not helpful. It adds fuel to the fire. They bailed Greece out and demand that Greece implement austerity measures. The economy won’t definitely grow well? Greece is not able to pay out the debts again and the vicious circle begins again and again.
Please don’t wait until the Greece’s debts become gigantic. An orderly default should be considered. I know Germany has difficulties dealing with local voters. But it’s an effort worth trying. Germany has been capitalizing from the crises in Europe. Germany will also the biggest loser if the Greece did default.
Europe shouldn’t have played too hard. The fears stemming from Eurozone is a self-fulfilling prophecy. Politics brought back the already dead crises. Global economic crisis is actually ended in 2009. Satisfying local voters and expanding national interests in the time of great crisis is a dangerous game.
We need to talk to Germany how to solve the crises. There are things Germany needs to do and there are things we need to do. Don’t take the world economy hostage. They are not going the most effected. Poor people in developing countries will die. It’s not a good way to reduce global poverty. Don’t do that!!!