The Syriza victory (Radical Greeks vow to see off age of austerity, 27 January) has lessons not only for the eurozone, but for the EU as a whole. The real question for all 28 countries now is: is austerity working? It is dragging the eurozone towards deflation and even in Germany annual growth is now falling below 1%. In the UK all three main parties, tragically, agree that deep spending cuts must continue to be made until the structural budget deficit is wiped out in 2019-20, even though wages have already fallen 8% in real terms, business investment has still not recovered, unemployment is still around 2 million, the trade deficit in manufactured goods at £110bn this year is now the largest in modern history, and household debt is now over £2 trillion and rising. This is not recovery, it’s semi-permanent stagnation.It’s not even as though the deficit is being reduced by these savage cuts. Because shrinking incomes have now significantly cut government tax revenues, the UK deficit, which is still nearly £100bn, is likely to rise, not fall, in 2014-15 and in future years. Since cutting the deficit has been made the centrepiece of economic policy, why carry on with policies that are manifestly failing to deliver this objective, while wreaking havoc in the lives of a third of the population? Continue reading...
 |
| READ THE ORIGINAL POST AT www.theguardian.com |
