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Are Europeans allergic
to fiscal responsibility?
I’m not the International Finance Major in the family (Hi, Cousin Wendy!), but I think I just deduced an amusing bit of irony in the news from Europe today. The governments of the so-called PIIGS nations (Portugal, Ireland, Italy, Greece and Spain) are facing mass protests and strikes in response to some tough fiscal policy changes lately.
Those changes, commonly known as ‘austerity’ measures, will essentially raise taxes and decrease national expenditures. So, here’s where the irony comes in:
The governments instituting these measures are, on the whole, socialist (big gov’t/tax & spend types), and while higher taxes for expanded services are not unusual to the people of modern Europe, higher taxes coupled with reduced special-interest spending are apparently something to shout about!
Because the sacrifices are being made to pay down the PIIGS’ out-of-control national debts, the citizenries are reeling from fiscal responsibility for the first time in the EU. So, why are Europe’s socialists being all conservative-like all of the sudden? To put it simply, they have to.
Perhaps realizing that run away debts would ultimately undermine the security of the European Union, the international body instituted on its member nations a cap on budget deficits at three percent of national Gross Domestic Product. (According to the Vancouver Sun, Greece’s budget deficit is currently 12.7% of its GDP).
Therefore these countries are being coerced into compliance, and are now actually budgeting and sacrificing to pay for past binges. All to ‘keep their credit score high’ or remain in good standing in the EU. Turns out there are even consequences in socialist dystopias.
So, what have the Euros gotten from 200 years of democracy? Corporate feudalism.
Nice work, guys.