11 Jun 2012

Yanis Varoufakis on Europe's "Dickensian Workhouse" and the Fiscal Waterboarding of Spain

When we talk about bank recapitalizations or rescue plans, what usually captures headlines are dollar or euro amounts, the names of various abbreviated, bailout vehicles -- be they the EFSF or the ESM -- top politicians, technocrats and international organizations like the IMF. This latest "Spanish bailout" is no exception. Dubbed a bailout for Spain by the media, this is really a 100 billion euro bailout for Spain's banks that adds to the tab of the already indebted Spanish government. But is this really just a blood wedding between banks and the state that will end in a blood bath of pain threatening to consume all of Europe in its wake?
Are these really solutions that channel the workhouses of the Victorian era, of a Dickens novel, in their conditions?

The workhouse was where the poor had to go for help with food, and a bed, and they worked for it...but life was intended to be so harsh that only the truly, profoundly down-and-out would apply. The work was so bad that it would deter anyone who could avoid it from coming and punish those who sought help. Work included breaking stones...

This seems a fitting comparison for bailout programs that impose more loans on bankrupt countries and harsh austerity on the public that is left begging for scraps only to be met with what optimists might call "tough love."

This workhouse metaphor is one that our guest, Greek economist Yanis Varoufakis, has used to describe the EU's solution to a crisis that has dragged on for almost 5 years in some countries, and even longer in others. He joins us to give his take on this latest Spanish "bailout", as well as the upcoming elections in Greece. Source

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