Wednesday, May 09, 2012

Is Europe Saying No to Austerity?

By mainstream media accounts, the presidential election in France and parliamentary elections in Greece on May 6 were overwhelming verdicts against "austerity" measures being implemented in Europe.  

I don't know what Hollande is talking about when he raises his voice against Austerity. First off, austerity was never really tried. Not really.

In France for example, according to Eurostat, annual expenditures have actually increased from €1.095 trillion to €1.118 trillion in 2011. In fact spending has increased every single year for the past decade. The debt there increased too from €1.932 trillion €1.987 trillion last year, just as it did every year before.

Real "austere". The French spent more, and they borrowed more.

The deficit in France did decrease by about €34 billion in 2011, but that was largely because of a €56.6 billion surge in tax revenues. Again, there were no spending cuts. Zero.

Yet incoming socialist president François Hollande claimed after his victory over Nicolas Sarkozy that he would bring an end to this mythical austerity: "We will bring back Europe on a track for jobs, growth and the future… We're no longer doomed to austerity."

This is just a willful, purposeful distortion. What Europe needs is competitiveness and entrepreneurship not the socialist rhetoric of Job and Growth. what socialists mean by job is paying people wages for doing little and growth is maintaining institutions that are not productive. 

sooner or later Europe will realise that the current lifestyle could not be maintained if they are not competitive. small and medium size businesses should be encouraged. entrepreneurship and hardwork should not be penalised by burdensome taxations. social welfare should be reformed and the public attitude toward claiming benefits needs to be changed. curbing welfare fraud is central to achieve this aim.