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OpEdNews Op Eds    H2'ed 8/20/14

Italian's Apology for German Austerity Diktats Lasts 24 Hours

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Message William K. Black, J.D., Ph.D.
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On August 13, 2014, the International New York Times printed an op ed by Beppe Severgnini attacking Matteo Renzi, Italy's Prime Minister. Severgnini offered readers this classic question and answer.

"So why is Italy's economy, the eurozone's third largest, the only major one in Europe currently flatlining? Last week Istat, the national statistics bureau, reported that it had contracted in two successive quarters for the third time since 2007, plunging us into a triple-dip recession.

How did we pull that one off? Plenty of plausible explanations blame the feckless government of Silvio Berlusconi, or the acquiescent administrations of Mario Monti and Enrico Letta that followed, the latter two having imposed the European Union's -- or rather, Berlin's -- belt-tightening on a country needing to boost consumption and investment.

But blaming Brussels, or anyone else abroad, is wrong. The rest of Europe followed the German diktat, and yet Italy is the only one suffering."

The last sentence is a lie of such breathless proportions that one is left agape. The German austerity diktat forced the entire Eurozone into a second, gratuitous Great Recession and Italy, Greece and Spain into unemployment levels last seen in the Great Depression. University graduates throughout the eurozone's periphery promptly emigrate. Portugal's largest bank, a massive accounting control fraud, just required a very large EU bailout. Everyone but the elite bankers and major corporations is "suffering" due to Germany's dual diktats -- austerity and a eurozone-wide race to the bottom to slash worker's wages.

One day after the International NYT published this apology for Germany's dual diktats it blew up in the author's face. The Wall Street Journal, which champions Germany's disastrous diktats, admitted that "Euro-Zone Economy Stalls in Second Quarter as German GDP Slips."

Even Germany is suffering from German diktats, which made the economic recovery so weak and fragile that modest trade sanctions imposed on Russia because of its invasions of the Ukraine caused the German economy to fall and overall eurozone growth to "flatline."

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William K Black , J.D., Ph.D. is Associate Professor of Law and Economics at the University of Missouri-Kansas City. Bill Black has testified before the Senate Agricultural Committee on the regulation of financial derivatives and House (more...)
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