Austerity Protesters Should Be Protesting IMF, EU Loans – Not Austerity

Though the attention of the media has largely turned elsewhere recently, protests against austerity measures are still raging in Greece, Italy, Portugal, Spain and France, among other countries. Strikes abound as people take to the streets by the tens of thousands to express their discontent. Unfortunately, the protesters have been misguided to protest the wrong thing. They have confused cause and effect to the point where they have totally lost sight of the source of what they are protesting.

As a result of the introduction of the euro, high-quality goods, mainly from Germany, suddenly became a lot cheaper for consumers in the eurozone’s peripheral countries – the same goods that their weak currencies had previously prevented them from buying. This allowed for an unprecedented spending spree in countries that had not exactly built up a reputation of being thrifty, anyway. Imports ballooned and trade balances consistently deteriorated[1]. The single currency boosted the northern countries’ exports while offering the southern countries a level of wealth that seemed too good to be true. And it was. .

We have come to find out that as Europeans we have all been living beyond our means. We bought into the fable that somehow the euro brought us Heaven. We thought we were getting something for nothing. Now that the boom years are over the so-called experts are desperately trying to keep the bust from happening, thereby only aggravating the problem. In typical Keynesian fashion, the European Central Bank and the IMF have rushed in with loans to the tune of hundreds of billions of euros. However, those on the receiving end will not be helped anymore than a heroin addict would benefit from being given another shot of heroin.

Needless to say, none of this would have ever happened without the euro in its current form. Still, even if any of the “PIIGS-countries” would have run up debt the way they have, the solution would have been very simple and much less painful: curb spending, let your currency devalue to boost exports and let the free market do the rest (i.e. free up resources that have been locked up in unsuccessful investments and corporations and divert them to where they can be put to use more efficiently). Today, however, taxpayers across the eurozone are on the hook for the debt crisis, thanks to the collectivist European Union. (More on that in a future blog post.)

It naturally follows, then, that the only way out of this quicksand is for the eurozone to break up so that all European nations can go back to their own currencies. Would this be the end of “the European dream”? Quite the contrary. It would be the resurrection of Europe, only in a different form. Besides, it would save us all a lot of money and we would at least get some of our sovereignty back.

Let’s face it, the idea of a “United States of Europe” was laughable from the start, dreamed up by dunderheaded collectivists with no connection to reality.

The dream is over. It’s about time we woke up.

[1] Eurostat. External and Intra-European Union Trade.  p. 134. Retrieved November 10, 2012.


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