Europe’s Debt Crisis - failing to learn lessons of history

Some old philosopher somewhere once wrote that “Those who fail to learn the lessons of history are condemned to repeat them.” Larry Elliott in the Guardian aptly demonstrates the truth of that maxim in his analysis of  the Eurocrats currently dealing with the Eurocrisis that has manifest itself  within the Eurozone, demonstrating the economic history is not  their strong point. http://www.guardian.co.uk/business/2012/aug/19/eurozone-latin-america-debt-crisis-1980

Elliott draws on the experience of the South American debt crisis of the 80s, pointing out that the cause of the crisis was the same as that currently affecting the euro and that thee solutions that were enforced then are the same as the solutions that are being put in place now.

The consequences for the countries of South America were disastrous. National debts continued to climb uncontrollably while as Elliott observes, the banks were treated with kid gloves and financial liberalisation continued unabated.

Elliott’s alternatives are worth reading, Already the Greek and Spanish economies are visibly shrinking while the cuts programmes have wrecked national income and led to spiralling levels of unemployment. Europe needs an alternative policy quickly. But as another old philosopher once wrote, “The owl of Minerva sounds only on midnight” (Hegel, in the Philosophy of Right.)

JC