martes, 19 de julio de 2011

"Why the euro crisis has just got a lot worse"

This is asked at the front page of my copy of The Economist, always arriving late here in Barcelona while I already could get one in the kiosk with a print date on the 16th. This has nothing to do with the crisis, this is the best the Spanish national mail company can do.

Now back to the title. Why or where did it get worse?

Without reading the articles yet, which certainly will be of interest, we all know it got worse because no real decisions have been taken so far.

It is like politicians live in another dimension where realism is not needed and it is all about positioning.

Own positions to be precise as when really helping their countries decisions would have been taken much faster (although that is why they are elected and get paid for by taxes).

In a divided Europe without jurisdiction for hard and unpopular economic measurements group wise no individual politician is willing to risk (its position) or can because of nationalism.

Even those in the local opposition, crying loud blaming the government for every crisis being their entire fault, have no real answer. It is just a matter of postponing and hoping of some market miracles. Like it solves itself or gets better.

Should we really be worried? Yes, we should but the world will not stop turning. Some will be less hurt than others but a new (or better prolongation of the current one) crisis will cost us much more.

As explained by many, like The Economist, it is not wise to keep on providing more and more aid without real reform, without signs of countries going deep to restructure debts and rebuild its economies.

Unfortunately politicians do not take decisions, they only extend problems. They do not solve problems; they leave them for their successors. They want to shine and be remembered as good leaders in the short period they have their stages.

It was like this for 50 years how developed supported developing countries where now after all we know what really happened with our (tax) money and finally some organizations decided to give aid differently.

It is time for the old democracies to do the same and perhaps it is therefore that this has to start with Greece getting down where it all started once followed by for example Italy as another former empire.

As long as politicians do not see a need of putting aside their own interest (from the US till China, from The Netherlands till Argentina, from Japan till Canada and from Russia till South Africa) there will be no real change.

Real change means a new era of communication and cooperation. Instead of contradictions (good example the current fight of Democrats & Republicans in the US) politicians should demonstrate they really care.

If the next 6 months the politicians in the euro area cannot find agreements on the future of the euro and the battled countries but only increase emergency funds more will be destroyed of what slightly has recovered the past two years.

This will mean more problems for Ireland, Portugal, Greece and also Italy will no longer be able to avoid real domestic trouble. It will mean more pain for Spain where corporate and public restructuring will increase unemployment up to 30% or even more.

Elections, sooner or later, will not change much. Like Spain many are too divided with too many individuals rather looking for personal gain than reforming a country. At the end reforming is tougher than leading a country in healthy times. Who wants to be the one making unpopular decisions?

Spain for example needs to restructure public domain, education, housing markets, its competitiveness in services and products and for sure its political systems. Who will do that? Will it really happen after 30 years of pampering by Brussels? Or do we need to wait for a next generation?

That is perhaps the real problem. We got spoiled with social security and by prosperity named consuming. Developing countries can no longer develop because all immigrate while developed is getting stuck in its own social systems. The longer this continues, the worse it will get.

Where are the type of leaders of 50 - 100 - 500 years ago that reformed countries after wars, revolutions, decolonization and human development? Where are those dare to say we failed? Which politicians can be realistic and dare to tell (us) the truth?

Or do we really need again these wars and revolutions to realize that what we have created is only to show off, for personal gain or to suppress others?

Compared to what human kind experienced so far historically any euro crisis is child’s play but let’s hope some adults stand up and make real history. It has been too long ago!

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