Europe's Terrifying Austerity

Tyler Durden's picture


'The unbearable harshness of being' a European in the midst of crushing austerity has forced everyone from France to Greece to pick up their pitchforks against those stability-minded and conscientious Germans. As Diapason's Sean Corrigan shows in this clarifying chart, the 0.18% drop in Eurozone Real Government GDP must have been truly devastating; or perhaps, just as we have said again and again, it's all about the flow not the stock and any lack of growth is the death-knell for what is called capitalism.

Source: Sean Corrigan of Diapason Commodities

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Wed, 06/06/2012 - 10:06 | 2499087 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Austerisaurus: The Beast That Will Not Die!

Wed, 06/06/2012 - 10:41 | 2499233 FlyoverCountryS...
FlyoverCountrySchmuck's picture

HOW DARE these evil Germans not want to pay for all these FREE CHEESE the Socialists have been promising for votes, for generations!


Don't they know it's just not FAIR???

Wed, 06/06/2012 - 10:52 | 2499274 redpill
redpill's picture

Anyone who willingly structures their life so as to be mostly or entirely dependent upon government and its promises in order to survive is worthy of little sympathy when that inherently dishonest organization fails to live up to its obligations.

Wed, 06/06/2012 - 12:37 | 2499367 ElvisDog
ElvisDog's picture

That's why the Greek elections will be so interesting. If the Greek people return the ND party back to power, I have no more sympathy for them. They deserve what they're going to get. It would be like the abused girlfriend continually going back to the boyfriend who beats her.

Wed, 06/06/2012 - 11:00 | 2499299 TWSceptic
TWSceptic's picture

I know right, it's like they think they have ownership of their money or something, just crazy people.

Wed, 06/06/2012 - 11:47 | 2499544 smb12321
smb12321's picture

Those who rail against austerity are like --- we'll fix the deficit "when things improve" --- "Social Security will be dealt with when employment rises" --- "we'll cut spending when GDP reaches (fill in random number)".  The problem, of course, is that when the time comes something else arises but NEXT TIME...

Does anyone believe spendin as normal will solve the basic problem of too much debt?  How will keeping the State the dominant economic player bring "growth"?  The dirty little secret is that austerity is denounced because it inherently shifts power from State to private sectors.  At some point, some time, some how, these clowns must face the music.   Like Korea or Japan or Estonia or any of a number of nations that have had to suffer for years due to foolish choices, EU nations must bite the bullet. 

Then again, if they wait long enough the FED will extend its helping hand.

Wed, 06/06/2012 - 10:09 | 2499099 Cthonic
Wed, 06/06/2012 - 10:13 | 2499115 hedgeless_horseman
hedgeless_horseman's picture



Si, mucho austero.

Wed, 06/06/2012 - 10:18 | 2499129 Mercury
Mercury's picture

Spain's Parador system is awesome.  When the EUro crashes I'm going back...

Wed, 06/06/2012 - 10:19 | 2499136 GeneMarchbanks
GeneMarchbanks's picture

“We’ve developed capitalism to the point where it’s eating us,” said his father, Jose Andres Arroyo, who’s been unemployed since his trucking firm in Madrid folded three years ago. “How did we do this? We’ve trashed the European welfare state.”

Wed, 06/06/2012 - 10:29 | 2499179 Mercury
Mercury's picture

If "capitalism" and "welfare state" switch places he's a lot closer to the mark.

Wed, 06/06/2012 - 10:31 | 2499188 aerojet
aerojet's picture

Amazing how they juxtaposed those concepts in people's minds!  Now we have millions of entitled people who are about to run out of entitlements and they are very, very pissed off.  I wonder if they are too lazy to start anothe war, though?

Wed, 06/06/2012 - 10:32 | 2499198 GeneMarchbanks
GeneMarchbanks's picture

Nay, he pretty much sums it up. You desperately need another set of books.

Wed, 06/06/2012 - 11:00 | 2499260 Mercury
Mercury's picture

Well, I think I already have as I’m generally suspicious of the (essentially Marxist) term “capitalism” unless it’s explicitly stated as being synonymous with things like free enterprise, private property and rule of law.

Probably since the Medicis it has been the case that most developed economies, including communist, have been dominated by abstract bits of paper (and the 1s & 0s kind) representing claims on real and feigned capital.  That to me is capitalism and we're not likely to get away from it any more than we're likely to get away from the ubiquity of computers.

Nonetheless, it’s hard to claim that the welfare state hasn’t played a leading role in this cautionary tale.

Wed, 06/06/2012 - 11:02 | 2499313 GeneMarchbanks
GeneMarchbanks's picture

The so called "welfare state" isn't going anywhere just as the notion of the 'State' as an impeding force on 'private' enterprise isn't either.

At this stage it's always smart to take a step back and ask where exactly a person stands on our present capitalist model?


Wed, 06/06/2012 - 11:59 | 2499634 Mercury
Mercury's picture

Right under the whip

Wed, 06/06/2012 - 12:02 | 2499652 smb12321
smb12321's picture

Of course the welfare state is going somewhere.  At some point, everyone - even beloved welfare states run by loving bureaucrats - run out of money or more likely, are unable to get trick more fools into giving them some.  In younger days (as a dumbass) I adored the new Europe - work a few hours, play a lot, no worries about health care, military or retirement.  How absurd.

An aging continent with few births and shrinking population has come this far by massive borrowing, denuding themselves defensively and astronomical taxes. Now it's 2012 - meet the real world, Europe.   

Wed, 06/06/2012 - 22:06 | 2501913 The Age of Usef...
The Age of Useful Idiots's picture

Your 'real' world is the world which is best described as neofeudalism. You and many millions have benn convinced that even though unprecedented wealth is being created, there is simply no way to afford public health care, public education, libraries, help the needy and have a society where eveyone will have a shot to make it through hard work. People like you idolize the 50s and the American Dream while forgetting that back then, corporations actually paid taxes and the upper tax-rate for the super rich was 90%. Look it up, and ask yourself why you don't know that.

We will all have to fight each other to death to survive on whatever crumbs the plutocracy throws at us, while we work ourselves to death till the day we die. Yes, free time is bad, because we might have a moment to sit back and reflect, or enjoy our families, or maybe you know, READ and educate ourselves.

The moment TPTB convince you that the 'real' world is a world with no middle class and where everyone is a corporate-banker slave looking out only for himself, is the moment you dig your grave and your society's grave. Because in a society where inequality has reverted back to the 20's, with the 1% controlling your representatives and owning all the media, it surely makes sense to think that the problem is public unions and teachers, because, you know, guys like the Koch brothers and their muppet Scott Walker tell you so, because, you know, they really care about you and your interests. Leaving you as the only alternative the 'Hope' guy to play the good cop while he also screws you, but gently and compassionately.

We deserve to be slaves. We can't compete with these guys. Good luck in that world. You'll need it.

Wed, 06/06/2012 - 23:54 | 2502154 smb12321
smb12321's picture

Jesus, lighten up will you?  You don't know Jack Shit what I think about the 50's. I know your kind - everybody is out to get them.  The GOP is evil, Dems are traitors, all governors and senators are slaves to the bankers, all Presidents are part of the plot, the citizens are "Sheeple" who deserve bad treatment, blah blah

There is no formula allowing an unproductive citizenry to support a welfare state providing "free" health care, retirement, education and checks for not working. Excuse me.  There are two ways - massive debt or wealth confiscation and redistribution.  Taxes are out. .  Europe's 50%+ rates can't come close and that's with a paltry percent or two for defense. Every damn dime is going into social welfare.  And European R& D is fading.  Last year the US was granted more patents than every nation (including Russia) in Europe combined. 

Thu, 06/07/2012 - 01:43 | 2502405 The Age of Usef...
The Age of Useful Idiots's picture

You think you will be better off than most other people. You think your vote makes a difference. You think you are rational. You think you will not ever need help. And most of all, you think than when everyone is for himself only, that somehow you'll do fine because, well, I guess you are that special.

Fine. Like I said. Good luck.

Wed, 06/06/2012 - 10:08 | 2499095 Kayman
Kayman's picture

The Dinosaurs are in Panic mode. But the small and nimble will survive.  In fact, the smaller your footprint the greater your chances.

Wed, 06/06/2012 - 10:10 | 2499106 Spastica Rex
Spastica Rex's picture

Can I still keep my new Escalade, and my two custom Harleys? Oh, and I have a new toy hauler for my family's quads - will that be a problem?

Wed, 06/06/2012 - 10:15 | 2499117 Treeplanter
Treeplanter's picture

Not a problem.  We share your fantasy.

Wed, 06/06/2012 - 10:10 | 2499104 bigwavedave
bigwavedave's picture

Meanwhile Marcus Suckerberg is rumoured to be in meetings with V and MA to allow children under 13 to have credit cards. Desperate?

Wed, 06/06/2012 - 10:10 | 2499108 blueridgeviews
blueridgeviews's picture

When will America be forced into austerity or will we just continue to suicidally spend until we collapse in fell swoop?

Wed, 06/06/2012 - 10:16 | 2499125 intric8
intric8's picture

Many of these European countries have more or less a homogenous population, and it's worse enough. With the racial clusterfuck that is now the U.S., it will not only become rich vs poor but race vs other race; the multiracial environment that made America a great nation will ultimately be its undoing. It will be madness

Wed, 06/06/2012 - 10:34 | 2499208 aerojet
aerojet's picture

No, it won't.  Responsible people (mostly--BUT NOT ALL--of European ancestry, ironically enough) are still the majority in most places and still in charge of running vital infrastructure.  If push comes to shove, the responsible people will wipe the floor with those who create problems.  It won't be pretty, but the only reason we put up with the free riders is because we have had the luxury of doing so.

Wed, 06/06/2012 - 11:09 | 2499346 Tapeworm
Tapeworm's picture

Just like you showed them in Detroit.

Wed, 06/06/2012 - 13:03 | 2499913 sskid
sskid's picture

The multiracial environment that made America a great nation.


The multiracial environment is relatively new development, sponsored in the sixties with good old Ted Kennedy aa frontman for the immigration reform act.

From my perspective this nation has gone down hill ever since.

Wed, 06/06/2012 - 10:18 | 2499135 Treeplanter
Treeplanter's picture

In 3 to 6 months.  What's your hurry?

Wed, 06/06/2012 - 10:22 | 2499148 lostintheflood
lostintheflood's picture

When will America be forced into austerity or will we just continue to suicidally spend until we collapse in fell swoop?


the latter...

Wed, 06/06/2012 - 10:16 | 2499119 CrashisOptimistic
CrashisOptimistic's picture

Stop Measuring Deficits And Debt As A % of GDP.

Governments serve people, not GDPs.  Measure debt as a % of population.

The reason this is not done is subtle.  They know GDP is baselined to grow at a higher rate than population.  By using this GDP yardstick, left wing types can get more gov't spending long term.

Wed, 06/06/2012 - 10:16 | 2499122 RobotTrader
RobotTrader's picture

Meanwhile, the pundits will spin it as:


1) "It can't get any worse"

2) "The worst is already priced in"

3) "The recovery that will follow will be enormous"

4) "Five years from now Europe's 2012 problems will be long forgotten"

5) "Why didn't everyone load up on risk assets when the 10-yr. was at 1.50%?"

Wed, 06/06/2012 - 10:17 | 2499128 LULZBank
LULZBank's picture

You switching sides?

Wed, 06/06/2012 - 10:25 | 2499163 Sudden Debt
Sudden Debt's picture

He's still pushing stocks, look at his last line.

Give it 5 more minutes and he'll give you some lozer stock advice :)


Wed, 06/06/2012 - 10:20 | 2499143 Cursive
Cursive's picture


Nice to see a glimpse of the old Robo (before he became overly-jaded and quoting Rasputin all the time).

Wed, 06/06/2012 - 10:56 | 2499288 walküre
walküre's picture

The funny thing is that ECB is not doing squat or at least they're not admitting it. They're putting the onus back on the European governments to fix their problems. LOL. The Europeans don't have individual CBs to fix anything. Is the ECB that stupid? But market is so confused that it is buying the lows here. We'll see how long this state of confusion starts. Greece is voting in a few weeks - again. Spain's economic output is back to 1994 levels and Italy hasn't even entered the stage full and center.

The soccer show is starting this weekend to entertain the masses and divert the attention.

They're all escaping reality. It's fucking crazy what is going on. The awakening will be rude and they will suffer one hell of a hangover.

Wed, 06/06/2012 - 10:16 | 2499124 LULZBank
LULZBank's picture

Austerity, a new word for slavery.

Wed, 06/06/2012 - 10:19 | 2499138 CrashisOptimistic
CrashisOptimistic's picture

Somewhat the reverse.  Without austerity, there can be no escape from debt.

Wed, 06/06/2012 - 10:22 | 2499149 LULZBank
LULZBank's picture

I dont have any debt, and never did leveraged bets that went wrong.

Why should I go through austerity, if you can please explain?

Wed, 06/06/2012 - 10:25 | 2499161 CrashisOptimistic
CrashisOptimistic's picture

Spend what you want.  

But if you're in a country whose government ran up debt, vote for the candidates who advocate austerity for government.

This is not rocket science.

Wed, 06/06/2012 - 10:29 | 2499181 LULZBank
LULZBank's picture

I have one life and so does my kids and family. Why should I or them pay for someone else's stupidity?

How about making the culprits pay?

This is no rocket science either.

Wed, 06/06/2012 - 10:33 | 2499199 CrashisOptimistic
CrashisOptimistic's picture

The culprits of government debt are those candidates who ran it up.  

Vote them out.  It is they who will hurt your kids.

Wed, 06/06/2012 - 10:36 | 2499216 aerojet
aerojet's picture

Voting them out requires a population that understand key issues and can act in their own self-interest but without asking for government largesse.  I don't think those people exist, for the most part.  If you're on the teat, you're trying to stay on it, just look all around Europe...

Wed, 06/06/2012 - 10:34 | 2499206 Lebensphilosoph
Lebensphilosoph's picture

The politician, the voter, the bailed-out banker, the government employee and the welfare scrounger? Can we agree on that?

Wed, 06/06/2012 - 10:37 | 2499221 LULZBank
LULZBank's picture

Rich getting richer and poor getting poorer, can we agree on that?

I did'nt vote as I dont trust any politician, so where's my justice?

Wed, 06/06/2012 - 10:41 | 2499236 Lebensphilosoph
Lebensphilosoph's picture

Yes. But it was government spending, not government austerity, amongst other things, that got us to the point of there being nothing left to hand out to the poor.

Wed, 06/06/2012 - 10:43 | 2499243 Lebensphilosoph
Lebensphilosoph's picture

There isn't nay justice. You are born into the system liek everyoen else and are forced to live in it.

Wed, 06/06/2012 - 11:38 | 2499515 q99x2
q99x2's picture

You should see the outfit they gave me to wear.

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