Thread

1. petcat · 1790821195 · focus · HN ↗

   You want to see what's really bad, a train wreck in slow motion, just look at what France is doing.

   They've been subject to EU Excessive Deficit Procedures for multiple years, must bring deficit-to-GDP ratio from ~5.8% down to 3% within 3 years despite virtually no GDP growth and complete political and societal paralysis about reducing any public benefit or welfare whatsoever.

   ECB will most likely get involved after 2029 to start austerity measures. You can predict how that will go over with the French public especially if Le Pen takes the presidency, which looks likely.

   Very tough times ahead and the EU is facing a critical point about its future.

   1. dv_dt · 1790845099 · focus · HN ↗

      I think austerity measures are counterproductive. After seeing how they worked (or rather didn't work) when imposed on multiple nations by the world bank, and self imposed in the UK and Germany, I don't think austerity works at this state of inequality.

      Perhaps short periods of austerity work in decades past when enough of the foundation was still established for public goods, but a this point of neoliberal economics, austerity just causes economies to slow or shrink

      1. adjejmxbdjdn · 1790848194 · focus · HN ↗

         Austerity can work in short doses and is intended for that.

         However, most western institutions and governments have used periods which required austerity to bake in long term privatization and government service cuts for ideological reasons, as opposed to treating it as a chapter 11 bankruptcy, for example, where they use it to clean and streamline their operations and programs and restart the services on a better footing.

      2. HDThoreaun · 1790890056 · focus · HN ↗

         The point of austerity isnt really that it works. The point is that its possible for an external actor to force a country into austerity. Its a last resort that is used when the domestic government is unable to or refuses to come up with a workable budget.

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