The Transnational Institute pocket guide to the Eurozone Crisis points out that:
“Much of the so-called debt crisis was caused not by states spending too much, but because they bailed out the banks and speculators. EU government debt had actually fallen from 72% of GDP in 1999 to 67% in 2007. It rose rapidly after they bailed out the banks in 2008. Ireland’s bank bailout cost them 30% of their national output (GDP) and pushed debts to record levels.”
” The European Union, more than 3 years after the crisis, still has not re-regulated the banks! No restrictions have been imposed on the size of banks . Little attempt has been made to separate high street retail banking from investment banking – which exposed ordinary people to the enormous risks taken by gambling investors. Prohibitions on the speculative trading instruments that caused the crisis in the first place are not yet in place or agreed. Finally, watered-down measures that will force banks to lower their borrowing and increase capital reserves will not be in place until 2018!”
“As austerity cuts swept Europe, the numbers of the wealthy in Europe with more than $1 million in cash actually rose in 2010 by 7.2% to 3.1 million people. Together they are worth US$10.2 trillion. The five biggest banks in Europe made profits of €28 billion in 2010. There are 15,000 professional lobbyists in Brussels, the vast majority of them representing big business.”
Austerity is not going to solve the problem. It’s only going to make the rich richer and the rest of us poorer. It’s also going to increase technocratic governments imposed on the poorer EU countries by the richer ones, taking away democratic rights and freedoms from people. We need to regulate the banks and financial services sector and stop the tail of the bankers from wagging the dog of society.
The Transnational Institute pocket guide to the Eurozone Crisis is downloadable as a PDF file.