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Considerations on austerity and South European unrest

November 17th, 2012

A right-wing columnist accuses the EU of mindlessly serving the interests of Western European banks by forcing economically paralyzing restrictions on highly indebted member states on the periphery of the continent. A left-wing pundit on the other hand sees no alternative to austerity and welfare cuts.

Commenting on the latest developments in the EU-Greek negotiations, Magyar Nemzet’s, Anna Szabó argues that the economic crisis has been further deepened by the policies of austerity. While the IMF has recognized that the crisis cannot be overcome through further restrictions, she continues, the EU wants to secure the highly speculative investments of Western European banks by forcing indebted countries including Greece and Hungary to cut spending, although “they are fully aware that part of the Greek debt needs to be written off”. All this suggests that the EU is following the interests of the banking lobby, rather than economic rationality, the pro-government columnist remarks.

“Although restrictions in themselves will not solve the problems, they have no alternative,” Róbert Friss writes in Népszabadság. Friss finds the anger and despair of demonstrators protesting against restrictions across the continent understandable, but believes that their anti-market message is counterproductive. Countries on the European periphery have no choice but to cut back on excessive welfare spending in order to reduce the deficit and balance the budget, since the more advanced economies of the EU will no longer finance their excessive losses, Friss contends.

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