The wheels are coming off the whole of southern Europe … Europe's debt-crisis strategy is near collapse. The long-awaited recovery has failed to take wing. Debt ratios across southern Europe are rising at an accelerating extreme austerity is breaking down in almost every EMU crisis state. And now the US Federal Reserve has inflicted a full-blown credit shock for good measure. A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. None of Euroland's key actors seems willing to admit that the current strategy is untenable. – UK Telegraph
Dominant Social Theme: We know what to do to save Europe and we're doing it.
Free-Market Analysis: We see similarities between what we observed in today's lead article and the ongoing European crisis. Increasingly, it does not seem as if the powers-that-be are engaged in a rescue operation so much as enmeshed in a purposeful metaphor.
The metaphor is not enunciated so much as acted out. A small group of individuals at the top of their respective regulatory democracies continually circulate from country to country in Europe discussing what to do next to defuse an endless economic crisis.
The lesson we learn from this is not one of efficacy, as nothing ever works, so much as an object lesson in power politics. These are the people, dumpy, frowsy and incompetent though they may be, that the demos has cast up as proxies for us all.
You may riot, you may weep, you may see clearly what needs to be done – but unless this group chooses to do it, the long, slow, torturous decline of the euro and the EU will continue.
And it is continuing, and getting worse, as this article makes clear:
… They hope to paper over the cracks until the German elections in September. A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. It alleges that Greece lacks the "willingness and fact, Athens is missing targets because the economy is still in freefall and that is because of austerity overkill.
… The Greek stabilisation is a mirage. Italy's slow crisis is again flaring up. Its debt trajectory has punched through the danger line over the past two years. The country's €2.1 trillion (£1.8 trillion) debt – 129pc of the point of no return for a country without its own currency.
Standard & Poor's did not say this outright when it downgraded the country to near-junk BBB on Tuesday. But if you read between the lines, it is close to saying the game is Its point is that if "nominal GDP" remains near zero, Rome will have to run a primary surplus of 5pc of GDP each year to stabilise the debt ratio.
"Risks to achieving such an increasing," it said. Indeed. The International Monetary Fund has just slashed its growth forecast for Italy this year to -1.8pc. The accumulated fall in Italian output since 2007 will reach 10pc. This the country supposed to get out of this trap with its currency overvalued by 20pc to 30pc within EMU?
Spain's crisis has a new twist. The ruling Partido Popular is caught in a slush-fund scandal of such gravity that it cannot plausibly brazen out the allegations any longer, let alone another year of scorched-earth cuts. El Mundo says a "pre-revolutionary" mood is taking hold.
This last point is especially well taken. Above and beyond the idea we have that the very incompetence exhibited by top officials is a kind of message about who has real power and why, we can see social tensions continue to rise in both the US and Europe.
It is as if the West itself is being primed and prepped for a kind of sociopolitical explosion. The dominant social themes align and are easy to analyze.
In the US, we have racial politics and a determination to aggravate them via events like the Zimmerman trial now taking place. In Europe we have an ongoing downward spiral of the middle classes and the evisceration of the European model of cradle-to-grave socialist security.
The Middle East has been set afire and Egypt, Libya and Syria seem beyond salvaging. Brazil is convulsed, China struggles with a "hard landing" and India's hyper-bureaucracy is sinking into a deadly quicksand of corruption and paranoia. (They have just announced the formation of a technology-intensive "surveillance state" similar to those in the West.)
A globalist slogan of which we are aware is "out of chaos, order."
Are we approaching the chaos part?