Historical experience has shown that under capitalism a banking crisis is followed by an economic crisis, reducing the size of an economy, increasing unemployment.¹ It has further shown that in such a situation, public expenditure increases, as a result of the automatic stabilizers coming into play, while public receipts decline, due to the drop in output. Thus, a banking crisis leads to deteriorating public finances.²
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Comments on “The systemic crisis of the Euro – true causes and effective therapies” (2013) by Heiner Flassbeck and Costas Lapavitsas

Chapter I: The rationale of a monetary union and the determinants of inflation

Why monetary union? – This chapter provides the historical and theoretical basis of the paper.  Historically, it regards the “need for international monetary cooperation” as axiomatic so that the “crucial question” becomes what “form this should take” (5). In the same vein, it presumes that “Germany was the obvious candidate to become an anchor in regional monetary cooperation” (p.5). The logical conclusion of this line of argument is that “the only stringent long-term policy option for regional monetary stability is a monetary union” (7). The connection between the monetary sphere and the financial one is overlooked in Flassbeck and Lapavitsas argument; i.e., the fact that the elimination of the foreign exchange risks favours the expansion and deepening of the financial markets. This was a major factor in the decision by the EU leaders to proceed with the establishment of a European monetary union (EMU), which may thus be seen as an adjunct of financial integration in the EU.
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Auf dem Markt in Athen, Foto: Ed Yourdon

In den 1980er und verstärkt in den 1990er Jahren durchliefen die Länder Europas eine Privatisierungsphase, in deren Ergebnis die Wohlfahrtsstaaten drastisch reduziert wurden. Die Begründungen dafür unterschieden sich je nach Wirtschaftssektor, Land und Zeitpunkt voneinander, auch die Form der Privatisierung. Doch handelt es sich um ein Stadium in der Entwicklung des Kapitalismus, »eine Verschiebung der Beziehungen zwischen Staat, Gesellschaft und Wirtschaft, die politisch, sozial und ökonomisch einen durchgreifenden Wandel darstellt« (Frangakis u.a. 2009, 10).
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