LSE, December 3rd, 2012


Spain [...] was actually doing quite well up until the crash: it had a budget surplus. There were problems, but they were problems caused by banks, not by the government, including German banks, who were lending in the style of their US counterparts (subprime mortgages). So the financial system crashed and then austerity was imposed on Spain [....] It increases unemployment, it reduces growth; it does bail out banks and investors [...].

Europe needs stimulus [....] The Bundesbank doesn’t like it, investors don’t like it, banks don’t like it [....]

Europe’s policies make sense only on one assumption: that the goal is to [...] undermine and unravel the welfare state.