Tomás Ó Flatharta

Looking at Things from the Left

“Never Waste A Good Crisis” – Big Economic Recession Coming Our Way – Irish Ruling Class Cuts “Meals on Wheels” – EU Leaders Pour Petrol ⛽️ on Flames 🔥

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An Irish Warning : Sam Nolan reports his HSE “meals on wheels” service has been suspended. Friends and Comrades are rallying, Sam will be supported. Des Derwin reacts, very perceptively :

“I’m speechless. Just as an expanded service is needed. Have y’all noticed how the (Fine Gael!) state is building up its repressive apparatus for the crisis. Templemore early graduation trainees given crash course in public order (read riot control). New standing public order unit. (WTF?!) Scores of hired in Garda cars to ‘help the vulnerable’. Maybe the HSE is transferring the meals on wheels service to An Garda Siochana.”

Former SYRIZA Finance Minister Yanis Varoufakis Analyses the European Union Response :

Those of us who know how the Eurogroup works were not holding much hope yesterday. Nevertheless, Europe’s finance ministers managed to do even less than what we feared: They failed to use the fiscal compact’s proviso for loosening up fiscal policy across the euro area. They continued with the tragic error of treating a crisis of insolvency as a crisis of liquidity. And they failed to recognise that some countries, in particular those savaged by the never-ending euro crisis, need a great deal more support than others.
In short, the Eurogroup’s bazooka is no more than a pathetic waterpistol. It is time that Europeans pushed for something better than this. It is time that we organise at a transnational, paneuropean level to replace this instrument of austerity-driven recession, the Eurogroup, with an institution that can work for a majority of Europeans everywhere.

APPENDIX: The Eurogroup’s telling reference to “automatic stabilisers”
The Eurogroup communique referred to the “full use of automatic stabilisers”. What did they mean?
Here is an example of an ‘automatic stabiliser’: When people lose their job, they go on unemployment benefit. This means a transfer of money from the better off to the worse off. As the worse off, who are now unemployed, save nothing and, therefore, more of the money of the better off enters the markets. That’s what economists refer to as an ‘automatic stabiliser’ (‘automatic’ because no government decision was needed to activate it – the loss of jobs does it automatically | and ‘stabiliser’ because the higher portion of spending relative to savings boosts GDP ).
Can you see dear reader what the Eurogroup are really saying when confessing to relying to the ‘automatic stabilisers’ in the absence of concerted fiscal expansion? They are saying: Don’t worry folks. While it is true we, the finance ministers, are doing almost nothing to avert the disaster, when the disaster comes your job losses and poverty will trigger some automatic mechanism that will break the economy’s fall. A little like consoling the victims of the plague with their thought that their death will, through shrinking the labour supply, boost future wages…

Some Proposals for Resistance :

DiEM25’s answer to: What should they have done?
At the very least, the Eurogroup should have recommended to the European Council that the European Investment Bank is given the green light to issue EIB bonds worth €600 billion with the stipulation that, as part of its ongoing and recently enhanced quantitative easing program, the European Central Bank will support the value of these bonds in the bond markets. That €600 billion should be spent directly to support national health services and also be invested in sectors of the economy badly hit by the lockdown – while also nudging our economy toward greener forms of transport, energy generation etc. Additionally, the fiscal compact should be immediately side-lined and governments should effect a tax haircut for small and medium sized firms, households etc.
The above would probably be enough not to avert but to contain the recession to something like between -1% and -2% of GDP. To avert it completely, the Eurogroup should have decided to mimic Hong Kong and have the European Central Bank mint an emergency fund from which every European household is given between €1000 and €2000.

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