Crisis in Europe - Austerity Vs Growth: Is There Really a Choice?

Well I'm sure you've already worked it out yourself but you just can't avoid that question, nowhere to hide and nowhere to run. We are pouring fortunes we don't have into trying to keep several countries afloat in Europe while at the same time suffering all the pains of cut backs.

One of the big problems is that a sizeable portion of the general public don't seem to realise that austerity isn't a political doctrine or a strategy; unfortunately it's a fact of life. Given that there isn't any money left in the bank it seems pointless endlessly discussing how we should spend what we haven't got. France and Greece have now both elected political parties who espouse a "go for growth" policy, but however popular it may be with their electorate there's a huge problem with this political dogma. The elephant in the room being the fact that we haven't got the money to invest, it just isn't possible for everyone to borrow the money to give it a go. 

Principally due to the fact that there just isn't that much money in Europe, and even if it were possible to get it from somewhere, the IMF, China, Bill Gates, wherever; the payments on the debt would be so crippling that it would only compound the matter, and somewhat obviously leave us yet further in debt.

It's true that we need growth, as a famous industrialist once said "nobody ever built up a business on cost cutting", but any money spent on building the economy needs to be generated form savings made elsewhere. We know it's going to be hard, in fact it already is hard and things are going to get a lot harder but it's not a choice of the current coalition government. Vince Cable who is the epitome of Liberal Democrat culture and certainly isn't averse to putting the gloves on to fight for what he believes in has admitted that there isn't an option. We must try to everything we can within our limitations to encourage and assist the UK's economic growth, but there really isn't a plan B and just in case anyone thinks couldn't be worse so why not give it a go, throw borrowed money at it and see what happens? What happens is Greece where unemployment benefits have been cut by a quarter, overall unemployment stands at 21%, more young people are unemployed than in work and many Greeks fortunate enough to stay in work are having to take pay cuts of 30% just to stay in the job.

The irony of the situation is of course that the Greek people are rioting and demonstrating for more money and against the austerity package which the EU has demanded to be put in place before giving them further massive loans, but if they are successful in pushing through a new government which defaults on the loans and pulls out of the austerity measures, there won't be any more loans which means there won't be any more money to give them!

As I said earlier, I know things are hard and almost everyone is feeling the pinch, but do we really want to re-enact their Greek tragedy?

Article Source: Gazza Wells

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