Europe's New 'Values' - Austerity, Bloodletting, And Incompetence

Tyler Durden's picture

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Punxsutawney Phil Hammond, the UK chancellor, presented his Budget yesterday and declared five more years of austerity for Britain. As was to be expected. One doesn’t even have to go into the details of the Budget to understand that it is a dead end street for both the country and for Theresa May’s Tory party.

So why the persistent focus on austerity while it becomes clearer every day that it is suffocating the British economy? There are many answers to that. Sheer incompetence is a major one, a lack of empathy with the poorer another. Conservative Britain is a class society full of people who dream of empire, and deem their class a higher form of life than those who work low-paid jobs.

When you see that the British Parliament has even voted that animals don’t feel pain or emotions, you’d be tempted to think it’s a throwback all the way back to the Middle Ages, not just the British Empire. They’re as lost in time as Bill Murray is in Groundhog Day. Only worse.

But perhaps incompetence is the big one here. The inability to understand that if your economy is not doing well, you need to stimulate it, not drain even more of what’s left out of it. The people in government don’t understand economics, and therefore rely on economic theory for guidance. And the prevailing theories of the day prescribe bloodletting as the cure, so they bloodlet (let blood?). Let it bleed.

This is not a British problem, it’s pan-European if not global. Neither is the UK Tory party the only one being killed by it, all Conservative parties share that faith. They’re just lucky that their left wing opponents have all committed hara kiri, and joined their ranks when it comes to economics. All of Europe’s poorer have lost the voices that were supposed to speak for them, to economic incompetence.

Obviously, the US democrats did their own hara kiri years ago. One might label -some of- Bernie Sanders’ views left-wing, but he’s trapped in a system that won’t let him breathe.

All of this leads me to question the following:

A letter in the Guardian published on Sunday called on Chancellor Philip Hammond, ahead of his budget presentation on Wednesday, to end austerity in the UK. It is signed by 113 people, a veritable who’s who from the academic field, one -economics- professor after another. They include people like Joe Stiglitz, Steve Keen, Dave Graeber.

Looking at the letter itself, and then the entire list, makes me wonder: I’m sure you all mean well, guys, but I think perhaps you should first of all ask yourselves how it is possible that such a large group of well-educated ladies and gentlemen has become so utterly sidelined over time when it comes to major economic decisions, has allowed itself to be sidelined.

It’s one thing to ask what someone else is doing wrong, it’s another to ask yourself what you have done wrong. My question to y’all would be: where were you? Shouldn’t you have written and/or signed this letter 7 years ago, or 5, even just 3? Isn’t calling on the Chancellor to ‘end austerity now’ a bit late in the game?

Is it even the right call, or should you maybe be calling for him to simply resign (along with the entire cabinet)? After all, what are the odds that the Tories are going to turn on a dime and reverse their entire economic policies? They would look stupid, and they will avoid that like the plague. Here’s that letter:

The Chancellor Must End Austerity Now – It Is Punishing An Entire Generation

Seven years of austerity has destroyed lives. An estimated 30,000 excess deaths can be linked to cuts in NHS spending and the social care crisis in 2015 alone. The number of food parcels given to impoverished Britons has grown from tens of thousands in 2010 to over a million. Children are suffering from real-terms spending cuts in up to 88% of schools. The public sector pay cap has meant that millions of workers are struggling to make ends meet. Alongside the mounting human costs, austerity has hurt our economy.

 

The UK has experienced its weakest recovery on record and suffers from poor levels of investment, leading to low productivity and falling wages. This government has missed every one of its own debt reduction targets because austerity simply doesn’t work. The case for cuts has been grounded in ideology and untruths. We’ve been told public debt is the outcome of overspending on public services rather than bailing out the banks. We’ve been told that while the government can find money for the DUP, we cannot afford investment in public services and infrastructure.

 

We’ve been told that unless we “tighten our belts” we’ll saddle future generations with debt – but it’s the onslaught of cuts that is punishing an entire generation. Given the unprecedented economic uncertainty posed by Brexit negotiations and the private sector’s failure to invest, we cannot risk exacerbating an already anaemic recovery with further public spending cuts. We’ve reached a dangerous tipping point. Austerity has failed the British people and the British economy. We demand the chancellor ends austerity now.

If you ask me, Britain reached that ‘dangerous tipping point’ years ago. And talking about ‘an anaemic recovery’ sounds like total nonsense. There is no recovery, as you yourselves make clear with the examples you provide of the consequences of austerity. So why say it?

I don’t know if we can blame individual economists for missing out on the effects of political measures, although when those measures affect economics, we probably should. But regardless, the big game in town these days is politics, not economics. Everywhere there are ‘leaders’ fighting for survival, and it’s telling that Donald Trump is not nearly the most besieged among them.

That Theresa May is still PM of the UK is as surprising as it is ridiculous. But it also points to the lack of coherence and timing among her opponents, including those 113 academics. That once May goes, which could be soon, the Tories get to pick yet another one of their own as PM, is even more ridiculous. To top off the absurdity, the next in line could be Boris Johnson.

A country that finds itself in a quandary as immense as the UK faces post-Brexit vote, should not let one party that had a mere 42% of the vote, run all the plans, decisions and negotiations, be they domestic and/or international. There is no surer way for disaster to ensue. It’s the system itself that fails if that possibility exists, more than that one party.

The UK needs, more than anything, a national government (or something in that vein), an option in which at least a majority of the population is represented. That is much more important than some call for some policy to be halted.

Moreover, everyone should see this in the light of international political developments as a whole. What’s happening in Albion is not an isolated event, and it doesn’t happen under the influence of isolated forces or developments. What happened overnight on Sunday with the failure of Angela Merkel’s attempt to form a German coalition government makes that more obvious than ever.

Traditional political parties, left and right, have been swept out of power all over Europe. Germany is just one more example. The process doesn’t have the same shape, or the same speed, everywhere. But it’s real. It’s due to a mixture of rising inequality, deteriorating economic conditions and no left left to represent the people, the victims, at the bottom of societies. Well, and there’s the incessant lies about economic recovery.

But let’s take a little detour first. Just in order to illustrate the point even more. The Guardian ran a piece, also on Sunday, on newly minted French President Emmanuel Macron and his government and party, that is pretty hilarious.

New Head Of Macron’s Party Vows To Recapture Its Grassroots ‘Soul’

A fiercely loyal, self-styled “man of the people” has been appointed to lead Emmanuel Macron’s fledgling political movement, La République En Marche (The Republic on the Move, or La REM), promising to recapture the party’s“soul” after a hiatus since the recent election win. Christophe Castaner, 51, a burly member of parliament with a southern accent, styles himself as both in touch with everyday voters and devoted to Macron’s well-oiled communications machine. He was handpicked by the French president to take over the running of La REM.

 

Castaner, currently a minister and government spokesman, was a Socialist mayor of a picturesque small town in Provence for more than a decade before becoming one of the first politicians to jump ship to Macron’s centrist project in its early days. He grew up in a military family in the south of France, left school before his final exams – which he retook as an adult – and has a reputation for straight-talking. At La REM’s first party congress in Lyon this weekend, Castaner was the lone candidate for the role of party director.

 

He was picked by Macron at a presidential palace dinner, then confirmed by a group of party members with a show of hands rather than a secret ballot, sparking criticism from the media and political observers about undemocratic internal party practices. A small group of 100 party followers went public last week with an open resignation letter, claiming the party had no internal democracy. Others, including La REM members of parliament, responded that Castaner was “the obvious choice”.

Macron founded his own movement because he saw an opening to defeat all traditional French parties. He won the presidential elections, and only after that organized the movement into an actual political party ahead of parliamentary elections. I’d still like to see someone explain who paid for the campaigns of hundreds of candidate parliamentarians. It’s a mystery. France’s banking and business sector?

Macron has set an example for many people in other countries, provided they can unravel that mystery, of how they, too, can defeat incumbents and other long time power blocks. There are two countries where such tactics have until now not seemed possible: the UK and US. But that, too, will change.

In many other European countries, age-old blocks have already been beaten into submission. Even if many deep state powers in France et al have merely shifted allegiances. As their peers elsewhere will. But that’s just the way things are. It doesn’t negate the huge shifts in politics. Voters all over feel they’ve been had for too long. It’s all part of a tectonic shift. Deteriorating economic conditions will do that for you.

What makes the article on Macron et al so entertaining is the mention of the promise to “..recapture the party’s grassroots “soul”. A political party that’s barely a year old does not have grassroots, let alone a soul. Anyone who thinks otherwise is not thinking. And that is a good thing to keep in mind, because Macron’s example – and success- will inspire similar initiatives in many places, and similar nonsensical narratives.

Ironically, if that’s the right word, the world -or at least the EU- is now Macron’s oyster. Angela Merkel has shown her weaknesses, and she has blinked first, in her failed attempt to form a new cabinet, and she will not recover from that, not with anything remotely like her past clout. Maybe -more than- 12 years as head of state is not such a good idea.

While Macron is a blank sheet without a soul or grassroots, Merkel and her CDU party possess both in spades. It’s just that in today’s world these things tend to easily turn against you. You’re better off without a past that you can be blamed for. Macron has no past. And no soul.

Merkel leaves an enormous void both in Germany and in Europe (even globally). And it’s one thing for her to have become too powerful at home, but it’s quite another for the same to have been allowed on the entire continent. Germany, under any leadership, will remain the only power in Europe that matters, no matter what grand plans Macron devises. And that is the EU’s fatal flaw. If you have 27-28 sovereign countries and you try to order them around all the time, you have a problem on your hands.

There is an inherent contradiction in being both the leader of political union’s strongest country and -simultaneously- of the union as a whole, and Merkel has bitterly failed in addressing, let alone solving, that contradiction. Merkel didn’t create it, true enough, but because she is/was the boss, it is her responsibility to address it. Even if it’s ultimately unsolvable.

In the present setting, any German leader, Angela or someone else, will be voted in by Germans, and focus on their interests, to hold on to these votes. But German interests are not always the same as those of other countries. That means Germany will always come out on top, and more so as time passes. Ever more wealth will flow to Berlin. That’s the fatal flaw, and at present there’s no way out of it.

With Merkel weakened, or soon even gone, lots of voices will speak up across Europe for their countries’ sovereignty, and the attack on them from Brussels. We already have Poland, Czechia and Hungary. Expect a lot more noise from Italy in the run-up to its elections. The power balance that Merkel held together is gone for good.

Yes, her refugee policy backfired, which is no surprise given that she decided on it like some empress. But what may be more important is that her traditional opponent, the left wing SPD, was not only her coalition partner, but it has no ideas that are notably different from her conservatives, and its new head is the former head of the European Parliament.

Where does one turn as a German who doesn’t want all that more EU all the time? Either far left or far right. Everything else has become a homogenous blob, all across Europe. And all of that blob is in favor of imposing ever more austerity on the most unlucky in their societies, because bloodletting is the most advanced treatment they know of.

It’s not even so much the financial crisis that has caused a political crisis in Europe, it’s the answers to it, the incompetence. Greece is a far worse-off victim of austerity than Britain is, and Yanis Varoufakis has described very well why that is: an absolute stonewalling refusal to talk about any alternatives to bloodletting. Because austerity is an ideology bordering on religion, executed by people who care much more about their own careers than they do about their people.

Greece is beyond salvation, its economy has been so thoroughly destroyed it will take decades to recover, if it ever can. Britain is set to follow the Greek example. The blame for that will be put on Brexit, not disastrous economic ‘policies’. In the same way that the Greek crisis was blamed on the Greeks, not the German and French banks that treated the country like an overleveraged game of Texas Hold ’em.

After Merkel, Europe will fall victim to a vast power vacuum. In effect, today’s already ‘After Merkel’, even if it will take people a while to understand that. The EU is unraveling, and the blame goes to austerity and its incompetent priests. Including Angela. The bloodletters destroy their own economies, and they don’t understand that either.

Merkel hasn’t just demolished Greece, she has, in doing that, fatally undermined the foundations of the EU as well. And Germany. Look, ‘Mutti’ Merkel invited a million refugees to her country, and now refuses to let hundreds of war-traumatized children stuck on Greek islands join their parents in Germany, because she fears it could cost her votes. Talk about priorities. Theresa May does the same as we speak.

There’s a price to be paid for incompetence. It’s a shame that Merkel and Theresa May and Punxsutawney Phil Hammond won’t be the ones paying -the worst of- it.

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shitshitshit's picture

Don't you worry don't you worry child,

Bitcoin's got a plan for you

 

and precious metals

and dark matter

 

and steel

and lead

 

Metal makes us stronger

 

Escrava Isaura's picture

Europe's New 'Values …….Incompetence

Less or more Incompetence or competence is irrelevant.

Relevant is that we need less people.

Debt and growth are responses for a growing population needs.

Population growth is the problem. It’s unsustainable.

 

Future Jim's picture

Austerity? Awww. Did the widdle socialwists run out of other people's money?

Endgame Napoleon's picture

Watching PM’s Question Time on C-SPAN, I heard a lot of talk about “tax credits” and the British form of welfare. One rep even said people were living on those things in Britain. If it is anything like the USA, only two groups are living on the free rent, free groceries and monthly cash assistance from government, with a $6,318 child-tax-credit check to top off their low wages from the required, part-find work: single moms and immigrants with one male breadwinner. Everyone else under age 65, living on earned-only income from low-wage jobs, gets thrown under the bus from government 100% of the time, while politicians squawk about “poverty” among the very group receiving TONS of free stuff from government, most of whom also get help from other quarters, like family and children’s charities.

Luc X. Ifer's picture

How typical socialist. Just like in the former Soviet bloc. Guess why people of Eastern Europe started to wake up at the reality of what United trough Bruxeles Europe is, just a 2nd version of the former Soviet Europe united trough Moscow.

BuddyEffed's picture

I generally like this author. But this article might have connected austerity policy to resource depletions as part of the causality chain of dependency.

Bludklot's picture

They misspent hungreds of billions on all things Green. How many are dying because they cannot affort the energy to heart their homes? How much industry is stifled by energy restrictions? Doing stupid shit like shutting down hour nuclear plants to "save the Planet" and making up the energy loss by adapting wood pellets shiipped from the US as feedstock for your formerly coal fired power plants because it is "sustainable"? Increased standard of living is correllated with increased availability of energy.

Dincap's picture

There is also a lot of incompetence which is a natural consequence of ignoring what is capitalism. Actually the economic narrative is nothing more than an ideological defense and promotion of the interest of the few. Fake news corporate media and school have cut off any scientific vision which could be useful for most of the population.

The European Union in addition suffers a political project that is a Germany disguised war and occupation of the rest of the continent. Actually the oligarchies of the small countries are already Germany puppets. In some few places thete is still some resistance. 

However, even with a smaller or no growing population considered the current condition and undetstanding of capitalism the disaster and path to slavery for the most would be the same.

Endgame Napoleon's picture

We need less mass immigration that is buttressed by welfare, less pay-per-child welfare and more citizens in the workforce, spending via earned wages. We need fewer workers with unearned income from government that covers their major household bills, driving down wages for those who only have earned income, and creating an environment where work productivity does not pay as much as a combo of part-time work and high womb productivity. But according to the environmentalists, we need more pay-per-birth freebies to incentivize the creation of not only a maximum number of humans to compete with robots for jobs. We need more humans consuming natural resources for the sake of the environment.

Logical.

philipat's picture

This article is complete BS. Has the author not noticed that all the major Central Banks, especially the ECB, have been printing money like it went out of fashion. Is that not stimulus? The ratio of Debt/GDP of all major Nations is in uncharted territory and there comes a point where further stimulus is just out of the question. The problem is too much debt; and the answer to too much debt is not more debt.

Europe and Merkel's problem is not economic but cultural and social. Specifically, the peoples of Europe are rejecting a totalitarian anti-democratic EU regimen forced on them by unelected bureaucrats in Brussels and also rejecting the destruction of their Christian heritage by Muslim hordes in unlimited numbers, thanks to Merkel.

The author sounds like he is a Merkel/EU shill, appointed to suggest the finger of blame elsewhere.

BigJim's picture

Artificially low interest rates ultimately wreck capitalist economies by destroying the price signals that inform entrepreneurs which businesses are viable.

But if rates were to rise, governments would have to borrow more just to meet the interest payments... and, ultimately, wind up where Greece is.

Paradoxically, the time to pay down the debt is now.

Greece isn't a victim of austerity. Greece is a victim of exactly the kind of out-of-control, "stimulus" spending these idiotic Keynesian "economists" are advocating.

JohnGaltUk's picture

You are right about the debt issue. They can only supress interest rates for so long before the market teaches our politicians a good lesson.

Folks forget that the whole of Europe defaulted on their sovereign bonds back in 1931/2. Technically the UK did not because they went into a moritorium but I dont think they will be so lucky this time.

It will happen here though, my New Zealand passport ready before the violence happens.

Endgame Napoleon's picture

Most people will not have the money to leave.

JohnGaltUk's picture

If you need an indicator, it will be direct taxation of housing. For simply owning property you will get taxed, property is not movable and they know where you live. Its a very simple but brutal way of taxation. When rthe Roman Empire collapsed they started to tax homes so heavily that folks simply packed their possessions and walked away from their homes.

Guess what the Roman Empire collapsed over unfunded pensions! Sound familiar? Oh they also had a standing army which are very expensive to maintain.

Endgame Napoleon's picture

Supposedly, Keynesian economics says to pay down debt when times are good and stimulate the economy when times are bad, but it seems like people with powerful microphones have more and more difficulty identifying bad times.

Times were good all through Clinton, allegedly, yet real wages were falling for the vast majority. The same echo chamber existed under Bush until the housing collapse. Times are good! Times are good! Stocks are up!

According to the Fake News, USA, our economy was fabulous all through the Obama Administration, which was above criticism, and yet, the mainstream media was fully supportive of every stimulus measure put out there by Dems. Even though the MSM hates Trump, times are again good.

It is not Keynesian. But what you say makes sense from a business standpoint, in that it seems like a lot of companies are massively valued under the dome of a giant bubble.

Besides, whether or not austerity works, the stimulus plans these vote-pandering politicians concoct are unfair-cubed. It heightens social tensions to hand out the candy in such an unfair way.

They punish work productivity, while rewarding womb productivity. They have to take it to an extreme, piling on more government freebies with each birth, rewarding womb productivity on a per-child-produced-to-compete-with-robots-for-jobs basis so much that the womb-productivity freebies exceed income gained through work. It drives wages down, too, by putting so many women into the workforce with an incentive to accept low pay to stay below the income limit for welfare.

Free EBT groceries for a single mother of two: $450 per month

Weekly take-home pay in a full-time $10-per-hour job: $400 per month

Per capita income across many states: around $19,000 per year

Child Tax Credit check for a single mom of 3: $6,318

Her child tax credit [alone] equals 3 months of take-home pay in a full-time job—4 months in many jobs.

I do not know about Britain, but America has a mountain of underemployed and out-of-the-workforce citizens, particularly those who do not get this pay-per-birth money from government for working [not very hard] 20 hours per week to comply with welfare stipulations.

kellys_eye's picture

So immigration, the Islamic issue, corporate greed, dictatorship (EU), .gov incompetence, failure to implement Brexit, consideration for handing £40bn to the EU, establishment intransigence, drive to criminalise everyone for everything, climate change fraud, green energy, the energy price rip-off, inflation, pension theft, unjust legislation, snoopers charter but, above all else, the Bl00dy Russians etc have NOTHING to do with the situation?

If the UK Government think 4 million votes for UKIP were a 'one off' (and swept under the carpet) they've not been keeping abreast of public opinion.  No, it won't be UKIP that threatens more change in the near future but those 4 million disaffected, pissed-off voters have been added to and they're looking for someone to take their frustration out on.

gunzeon's picture

speaking of EU shills philes, where's our mate The Ghordian Not ?

philipat's picture

Good question. He's been called out quite a lot recently by myself and others. I miss our discussions because he always suffers from "foot in mouth" disease before he stops responding! He's probably concluded that ZH readers are just a bunch of "deplorables" and not worth spending the time on. That or the EU cot off his contract for not being terribly effective with his propoganda, at least in the Fight Club?

Dincap's picture

It is not a stimulus though the intervention has saved from greater disasters.

The so called stimulus channels financial resources to very few having saved a lot of burnt fictitious capital.

ludwigvmises's picture

I love how we're pointing fingers how Europe is inept, unraveling and going to hell in a hand basket. Is that supposed to make us feel better about our pathetic excuse for a nation?

JohnGaltUk's picture

That article is utter nonsense, I think it might be Jerrmy Corbyn using a nom de pume.

I live in the UK and have done since 1995. I am getting the distinct feeling here that we are getting near the end game.

You can see the state slowly collapsing, roads and footpaths are falling apart, you can no longer ring up and get a doctors appointment anymore, the doctor calls you back to see if it is serious enough to come in. Our schools are falling down, my police station is closing down although it was newly built in about 2006. They turn of atreet lighting at night in some areas to save a few quid, our rubbish gets collected every fortnight instead of every week. My wife called an ambulance for a very elderly lady that had had a fall and it took over 4 hours to turn up. Lincoln hospital are taking over an hour to unload sick people from ambulances. Our A&E has closed down and Grantham A&E is only open 9 to 5 now. Our main area hospital which is the brand newly built Kingsmill is under special measures because of very poor KPIs. My local council tax went up 5% this year and will be the same for the fore seeable future. Councils are so short of money they are becoming very agressive towards shoppers that might have a parked improperly, like your tyre touching a white line, they also have Civil Enforement Officers that will fine you if you drop a receipt or cigerette butt.

Officially as a nation we have 1.8 trillion in debt. We also have between 2 to 4 trillion off the book commitments and thats if they are being honest. Your average UK citizen is dumb to what is going on. If interest rates were to spike by 3% we would be broke very quickly, there is no possible way they could pay what Maggie Thatcher had to pay in the 80s which was 14%. The laws of mathmatics apply to us all.

In the budget Hammond announced another housing stimulus which is criminal is far as I am concerned. When this unreavels housing will collapse by at least 50% and the young will lose everything they deposited. Baby Boomers are retiring everyday and it is a double edge sword for the government, they stop paying taxes and become an expense. We are living an illusion at the moment but as soon as the bond bubble bursts it is game over and there will be much civil unrest. When folks start losing their pensions, their jobs, their homes and there is no longer an NHS, I think some folks will get upset and angry.

What do you think.

aqualech's picture

I think thatGreat Britain is obsolete.

philipat's picture

I think ALL Western "Liberal Democracies" (a/k/a Totalitarian Oligarchies) are obsolete...

Endgame Napoleon's picture

I am not. When you listen to British politicians on C-SPAN, they sound a lot like US politicians. The same issues are playing out over here in varying proportions. Their mass immigration is not from the same group, but from an economic standpoint, it has the same impact. Immigration should be restricted in number, non-welfare-dependent and merit-based. Do you see our politicians doing anything significant about that issue? Answer: no. Even after the Trump victory and its clear message, they are pursuing another tax cut for the rich, including big estate tax cuts for rich people with children, in addition to another tax-cash welfare reward for womb productivity at the bottom of the economic spectrum in the form of an expanded child tax credit, which, in this case, will go mostly to married moms with spousal income that covers rent and other major bills, working part time and driving down wages for citizens who lack unearned income. This will not budge the mass of out-of-the-workforce citizens, nor will it do anything about mass underemployment, including all the young people in their prime-earning years living in mom’s basement. Not one thing. But anything to get frequently absentee moms in workforce is pursued by our fake-feminist politicians. Give them a government check to spend on beach trips. That is what many of their unmarried counterparts do with it.

Dr. Bonzo's picture

Austerity? You sure you posting on the right website? Have you considered Huffpo? EU will collapse because of austerity. Knew this guy was a Keynsian clown all along.

Bloody Fkn Muppet's picture

Just an update on old 'values' - talking funny, moving your hands about a lot when you talk, weird foods.

Spaced Out's picture

Sorry but when it comes to economic incompetence, socialism wins the grand prize every single time.

ludwigvmises's picture

Yup and its funny we love labelling Europe as "socialist" (and therefore incompetent and backward) while countries like The Netherlands, Germany, Sweden or Denmark are kicking our ass all over the place in education/happiness/social upward mobility/social cohesion/crime/healthcare/well-being/drug abuse.

Robert of Ottawa's picture

Nonsense. The so-called "austerity" programs anywhere were not. If "austerity" means reducing the amount of increase in gvernment expenditure, then you dictionary was written by Bug Bunny.

Mustahattu's picture

A bit like America but luckily no Africans running for office. There's still hope in Europe where whitey rules.

Joe A's picture

Ah, an EU topic. That should draw Ghordius in. Where are you man?

BritBob's picture

Incompetence

 The Crazy EU- Gibraltar

MEPs and legal experts have claimed the veto over the territory’s future after Brexit would give Spain special status among EU nation, when they should be on an equal level.

The EU’s Brexit negotiating guidelines stated that the Brexit deal will not apply to Gibraltar without an “agreement between the kingdom of Spain and the UK”.

Experts have told the Telegraph that the veto could be illegal under EU law.

Spain's Gibraltar claim has NO legitimacy and YES would be illegal.

They've effectively signed the territory away 3x times!

Gibraltar – Spanish Myths and Agreements (single page):

https://www.academia.edu/34608739/Gibraltar_Spanish_Myths_and_Agreements

 

Spaced Out's picture

What's the weather like over there in Gibraltar?

The Conger's picture

I got as far as the vote on animal bit...which is a lie...the writer is a turd....

 

Pi Bolar's picture

What a crying socialist article. Have you met the workshy British benefit yobs and their Council houses, Play Stations and flat screen tv's with money for booze and fags?

FBHiDash's picture

We don't come to zerohedge for this garbage.

css1971's picture

The inability to understand that if your economy is not doing well, you need to stimulate it

 

"The economy" as measured by "economists", is little more than growth in credit. i.e. bank loans. Or put another way, growth in credit and debt. It's a banker pyramid scam that has people taking out new larger loans to pay off old smaller ones. You can never "grow" your way out of debt.

When a government borrows to spend, the money is created by the bankers at the point the loan is made. This has the efffect of extracting wealth from the citizenry who own the existing stock of money, making them poorer. So, stimulation, does nothing of the sort. It has a short term inflationary effect only. Feels Good Man, but only while the juice is on and only on politically favoured projects.

We've just had a decade of QE, "stimulating" the economy. It has done absolutely nothing to fix the problem. Failed in Japan, failed in the US, failed in the EU and failed in the UK. I guess Raul follows the quintuple down on failure paradigm.

 

We know what the solution is. We all know. They know what it is as well.... Debt repudiation. One way or the other. But we know no banker, or politician could sanction that.

BitchezGonnaBitch's picture

Some points:

- you CAN grow your way out of debt, provided the debt is taken out to fund productive activities that result in higher production. You can't BORROW your way out of debt, i.e. borrow to more to finance existing obligations, that is clearly suicidal.

- QE was never meant to stimulate the economy. The idea of QE was based on the premise that certain sectors of the "economy" are too important to lose (because politicians have friends, and shares, in them) and the loss would affect "the public good". We all know this is complete and utter BS. QE has been wealth redistribution from future payers to today's wealth hoarders. I mean, how are you supposed to live on only $500 million as Ted Turner remarked.

Socialism, fascism, QE, economy - those are all meaningless words that are meant to direct and shape our thinking. Stickers some bozos on TV slap on things to corral and channel your thoughts. The bottom line is that some people are willing to take from you to give to themselves, or their friends, by force or stealth. Thieves and robbers. Socialism, fascism, QE - those are just tools.

JohnGaltUk's picture

The definition of insanity is, trying the same action time and again and expecting different outcomes.

Socialism has NEVER worked not even once. Yet these clowns keep trying and they always use the same old excuses, it wasnt implemented properly, its different this time or as that weasely little cnut Tony Blair described it as the third way. He needs to be anally r0ped at a very inconvientant time.

Debugas's picture

George Orwell's "Animal Farm" all over

JohnGaltUk's picture

Was meant to be a fucken novel not a blue print!!

squid's picture

"But perhaps incompetence is the big one here. The inability to understand that if your economy is not doing well, you need to stimulate it, not drain even more of what’s left out of it. "

 

 

Wrong as the non-resession of 1921 proved.

 

But we're both right because what the British today call austerity is what 20 years ago would have been termed a drunken sailor's bing.

 

The government can't stimulate anything, it's been stimulating since 1945. We're all stimulated out. I would like the government to fire themselves completely and let things dry out.

 

Haven't fucked up enough already?

 

Squid

JohnGaltUk's picture

Squid you are right.

I would like to see a society where all individuals traded amongst each other through voluntary consent. I believe we should have limited terms for politicians to stop corruption. I would also like to see a voluntary way of funding government, perhaps through a national lottery where the citizens and show their displeasure by turn the money spigot on and off. We also must come up with restricting governments ability to borrow for consumption because it is fucken mental. We could come up with a way to have proper democracy through voting on the web.

God I get sick and tired of people in the UK blaming capitalism for our failings. The UK has not been capitalistic since the 18th Century. We have state housing, we have state education, we state health, we have state television & radio.

Uk government is in the state of collapse right now and what is coming will make the poll tax riots look like a walk in the park. If any eastern Europeans are reading this, run for your lives because when the economy turns down hard, they will always blame the immigrants, it happened in Germany against the Jews and it happened in the USA against the Irish.

When the next economic cycle turns down it will not be considered a recession or depression but will be described as an “economic event”.

Debugas's picture

Q: the ECB, have been printing money like it went out of fashion. Is that not stimulus?

A: It is but its target is wrong ( banks not ordinary people )

Q: The ratio of Debt/GDP of all major Nations is in uncharted territory

A: It is but have you noticed that the most developed nations are those that have highest debt/GDP

Q: The problem is too much debt;and the answer to too much debt is not more debt.

A: Agreed. But this is an easily resolved problem - just write off the debt and start over

Q: Europe and Merkel's problem is not economic but cultural and social.

A: Indeed the problem is social - no power will ever let the people be free, instead it like parasite will use force to tax everyone to death

 

The real problem is that noone has any vision on how society should be organized for harmonious existence.

Just to illustrate - to kick start economy one should untax labour but doing so will make government bonds valueless so it wont be able to borrow money to stimulate the economy. No government official has a clue how to go around this dilemma

gmak's picture

You rag on "austerity" - but the fact of the matter is that it is excessive spending and borrowing to pay interest that is stifling the British Economy. You cannot steal from the future to have a higher standard of living TODAY, without this leading to a reduced standard of living in the future as that debt comes home to roost.  The only way to avert this would have been if all that debt went to create NEEDED productive capacity instead of welfare and waste.

 

All that borrowing to create the illusion of a high standard of living has led to excessive capacity in "wants" and not enough in "needs".  It has led to the dangerous illusion that ANY immigration would solve the problem. It's the old Keynesian broken window fallacy applied to the population. "If we increase the population by importing anybody and "give" them money, then their spending will boost the economy".  Why not just print, then, and give it to the existing population to spend?  It's the same stupid thought process that has led to the "increase the minimum wage", everywhere.

THE DORK OF CORK's picture

Austerity  is  never  defined  in  this  article  -Dorks  definition  is  correct  -  that  it  is  the  rationing  required  to  feed  the  war  &  consumer  war  economy

THE DORK OF CORK's picture

Austerity  is  required  for  economic  growth  ,

however  economic  growth  is  merely  a  increase  of  prices  resulting  in  lower  real  end  consumption.

 

brushhog's picture

I've been hearing the EU, and the USA are "unraveling" for along time. The market is crashing, real estate is crashing, the bond bubble is going to pop, civil war is coming, TEWAWKI is coming, the S will H the F, etc etc. And we all keep on keeping on.

MPJones's picture

What incompetent drivel. Read the Austrians to try to understand long-term economics. The planet is not an infinite source of free stuff and an infinite sink for waste.

Hammond should in fact have tightened more and in particular directed resources from consumption, such as unaffordable public sector pensions, to investment.