The Fitch Ratings agency has downgraded the credit of another five European countries ― Belgium, Cyprus, Italy, Slovenia, and Spain ― citing “the financing risks faced by eurozone sovereign governments in the absence of a credible financial firewall against contagion and self-fulfilling liquidity crises.”
In other words, these self-styled fiscal medics plunged headfirst into deadly disease without making sure they had all their shots. Is every European country that tries to find a clean end by which to lift up this mess now doomed?
Klaus Schwab, the World Economic Forum chairman, opened last week’s annual gathering of the world’s economic and political elite in Davos, Switzerland, by proposing the following wisdom at a time when change purses are circling the drain: “My wish is threefold ― that we build by searching for constructive new solutions and models, that we bond by looking for long-term vision, and that we bind by creating the necessary underpinning framework of shared values.”
Of all the possible solutions, that’s definitely not it. Presumably, Schwab ― bless his heart ― is 13 years old and hasn’t gotten “the talk” yet from mom. I definitely would have swooned at such a romantic line in high school, in the days when I was hitting up my parents daily for lunch money and thought I’d marry Johnny Depp. I’ve since sobered up, I pay my own bills, and Johnny obviously blew me off ― so this kind of talk does nothing for my cynical realist heart. It’s the kind of self-flagellating collectivism that got the world into this mess in the first place. Permit me to propose a new mandate: “Focus on saving yourself first, so you can then help others.”
The “me first” concept ― or what I now like to call the “Costa Concordia captain’s mantra” ― hasn’t entirely escaped German Chancellor Angela Merkel and French President Nicolas Sarkozy, thank goodness. Amid all Merkel’s rhetoric about greater political integration and economic control to “fix” the eurozone mess, Germany and France have still toyed more sensibly with the idea of the highest-rated EU countries issuing new, separate debt bonds at lower interest rates so they can then funnel money to the hopeless ones that are taking on debt faster than they can pay off the interest that gets jacked up higher with each credit downgrade.
Nice to see there’s still some instinct of self-preservation. The unspoken truth is that the eurozone can’t be saved as a whole. It’s only by individual countries getting their act together and crawling ashore that they can ever hope to throw a life preserver to others. But even self-preservation is becoming less feasible as the situation grows direr and there’s increasingly less to preserve.
As Fitch points out, a deepening recession could lead to greater public outcry and the rejection of austerity reforms. Italy’s post-Berlusconi prime minister, Mario Monti, is currently contending with taxi strikes after proposing to give out more licenses in an attempt to increase competition, jobs and performance in the sector. Monti is also seeking to license more gas stations, notaries and pharmacies in an attempt to spur free-market competition and take power out of the hands of the relatively small few who like to keep business in the family ― literally. Just under one in five notaries are related to someone in the business, according to a Bloomberg report.
Seeing as how these unions in their current form were conceived by a fascist dictator named Benito Mussolini whose heyday was nearly a century ago, perhaps the system’s a bit dated. Monti still has to get it through Parliament, and many Parliament members work in these sectors themselves and may not want to vote against their own interests within the socialist system.
Italy also benefits from Monti being a “technocrat” ― which is code for a non-politician who was parachuted in to fix things but isn’t tethered to political power at his umbilical cord. Unfortunately, the rest aren’t like him, as they face re-election.
Socialism and its accompanying economic devastation thrive on complexity and red tape. If something is so simple that anyone can figure it out, then a socialist is being deprived of an opportunity to make a livelihood out of simplifying or translating socialist nonsense for the layman. A whole system is built up around the complex nonsense, with everyone else getting sucked into the socialist vortex and thrown a few shingles for the sake of giving socialists and their cronies some other people over which to lord and thereby justify their parasitic existence. Before long, economic Stockholm Syndrome takes hold, and they panic at the idea of having to make a living outside of parameters defined by Mussolini.
That’s the dragon Europe is now stuck having to slay.
By Rachel Marsden
Rachel Marsden is a columnist who writes regularly for major publications in the U.S. and abroad. Her website can be found at http://www.rachelmarsden.com. ― Ed.
(Tribune Media Services)
