WEEKEND ECONOMIST: Restless Spain

This report from Bill only confirms my former most pessimistic thoughts so that now I am somewhat of a believer that there is much to be concerned about in Europe for the businessman like myself (See WEEKEND ECONOMIST: Restless Spain, July 1).
I am concerned about the ability of Italian banks and their offshoots such as Bank of Austria to weather the storms when they start to blow/erupt especially when one considers what the contagion fallout to Italy will be from a Spanish Santander Bank problem – remembering that they are very much exposed to a huge amount of long-term unsold speculatively built holiday apartments in Spain and I think Portugal also.

The writer has hit the nail on the head. The austerity measures are so totally unacceptable that the only solution to avoid social unrest is to go slow on implementing them (See WEEKEND ECONOMIST: Restless Spain, July 1).
However this raises the obvious question that, if this is to be the policy with austerity measures - pass them on paper and then go slow implementing them - what's the point of it all? All you are doing is annoying people, giving them a reason to throw rocks at the police, surround parliament and in Greece's case wreck this year's essential tourist industry.
It seems to me that what needs to be recognised is that what Europe is facing is far less an economic problem than a political and social structure problem. What needs to be recognised quickly is that the latest economic tactic of filling people with despair and telling them that for "deep economic science reasons that they cannot comprehend without a degree" things cannot get better for at least a decade, is not a socially acceptable functioning tactic either.
What it all boils down to is, are we going to seek a social restructuring or are we going to make the same mistake the twentieth century made, retreat into authoritarianism, and express regret when millions of those who may even have supported such measures find themselves on the end of an uncontrollable and uncontainable cycle of repression. Those who do not learn from history always repeat it.
The capitalist system as we know it, grew up in the period of industrial revolution and empire. It built on internal and external repression and on availability of cheap natural resources in the mother countries, and resources exploitable through cheap and slave labour overseas. The world has socially evolved but the economic system seems stuck in the past defending class and elite structures that are arguably irrelevant and indeed detrimental to capitalism's efficient functioning.

A few weeks ago there was an article in the Business Spectator that correctly identified the growing defect in our legal system. This man's experience demonstrates another facet of how it is impossible to obtain justice.
You correctly identify the political dimension of the problem and your work and the information you provide is extremely valued by me. As a member of the LNP however, I despair at not getting the messages you are sending out through the noise and clutter that surrounds our politicians, to them.
Somehow you have to widen your base if these very real wrongs are to be corrected. Robert Gottliebson regularly identifies public service incompetence and in its own way you are doing so too, why do priorities suddenly change, by what arrogant right do they have the option of writing unfair contracts. Locally, look at current position with contractors. Look at how immigration officials hobble our tourist industry. And one can go on and on (See WEEKEND ECONOMIST: Restless Spain, July 1).

This article is great but contradicts earlier assessments by "leading economists", including Bill, that the RBA will hike rates on the back of capital investment in the resources industry. So, which is it? Rate hike or rate cut? Boom or doom? (See WEEKEND ECONOMIST: Restless Spain, July 1.)

Bill, A good article which I enjoyed (See WEEKEND ECONOMIST: Restless Spain, July 1).
However cutting the PIIGS out of the EU seems self defeating. A bit like saying that Newcstle and the Hunter Valley should have been excised from NSW when that region had hard times after the BHP Steel Mill closure.
May I suggest that EU reform is desparately needed namely (1) an independent body with teeth to oversee fiscal discipline and (2) an increase in the EU taxes and budget to provide relief programs (fiscal equalisation) for the desparately depressed PIGS.
In the name of enlightened self-interest surely the Germans and French want to maintain their PIIGS export markets?