(Opinion) Markets and people by Wolfgang Streeck

Democratic Capitalism and European Integration

Hopes that the resolutions of European heads of state would stabilize the financial markets and solve the Eurozone debt crisis, once and for all, have risen with each new summit over the past two years, only to be dashed again once the fine print comes to light. Would investors really join in on the ‘voluntary haircut’? Was the bazooka, after all, not more of a water pistol? No one could say with any degree of certainty what should be done to repair the crashed global financial system. Some demand strict austerity, others growth; everybody knows that both are necessary, but cannot be had at the same time. The technocrats’ rescue packages alternate between the horns of ever-new dilemmas; ingenious patent remedies are offered by the score, but have an ever-shorter life span. If, the British veto notwithstanding, European leaders were able to sleep free of nightmares after December 2011’s summit agreement on a 26-nation treaty, and the ECB’s long-term loans of half a trillion euros to the banks at 1 per cent, soon after it was back to business as usual. One thing is for sure: ‘the markets’ will calm down when they calm down; but they remain silent about when that will be and what they will next demand. Will they attack France? If need be, of course. They will only be satisfied once they are guaranteed to get their money back, through national austerity packages, international deposit-protection agreements or, ideally, both.

Read more at New Left Review Magazine March – April 2012

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