Shaky European growth model

Keith Hudson

It is beginning to look as though the 17 countries of the Eurozone have managed to circumnavigate what seemed to be certain disaster at the beginning of the week.  As with the similar crisis of 2012, all might seem well for . . . a while until the totally flawed monetary set-up starts cracking open again.  Or perhaps I’m wrong and it will occur sooner this time.  Perhaps enough of the public service trade unions part of the Greek population won’t accept what its Parliament have agreed and persist in street demos, strikes and so on — and thus bring the crisis to a head again.

Either way, the far larger problem of the cohesion of the 28 countries of the Eruopean Union remains — and is worsening.  This is due to the continuing, mainly economic, migration of young males from central and eastern Africa, and a mixture of economic + refugee + asylum seekers and families from the Middle East and further into Asia.  Attention to this has been distracted by the Greek problem in the last two or three weeks, it will undoubtedly awaken again.

How soon this much larger problem becomes a crisis depends on the media.  Even if they go lightly on immigration headlines for a while, they’ll turn their attention back on immigration before too long and then the European leaders will have to start making up their minds about what to do.  As now, they have a choice between the ‘progressive’ segment at the left-end the middle-classes who would throw the doors open to everybody who wants to come, and the indigenous working classes who are now beginning to support extreme right-wing parties.

The ‘progressives’ are not likely to grow in numbers, but the latter  — steadily losing their real earnings under the continuing advance of automation and growing apprehensions about declining state welfare in the coming years — are, and considerably so, too, until something is done.

Couple all this with the slowing down of China’s exports (thus impacting on manufactured imports from Europe) and the economic growth model of European politicians and economists that has held sway for the past 70 years or so since the end of the Second World War is now looking decidedly shaky for Europe.

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