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For all of those readers who aren’t students of the 1930s – and why wouldn’t you be, given that we seem to be hell-bent on recreating it? – all I can say is, well. Be warned, the last time foreign creditors tried to circumvent the democratic institutions of a sovereign nation in order to impose ever-increasing deprivation on its working and middle-class population, via a series of coalition governments lacking clear mandates to do so, it did not end well. And that’s putting it mildly.
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At first blush, I’m tempted to cite Godwin’s Law, but I’ll bite. The Guardian is saying the crisis is escalated by protecting the banks (via an ever-mounting infusion of cash and debt writeoffs), while that Wikipedia article suggests the Weimar collapse was precipitated by banks withdrawing their loans and leaving German companies in the lurch. So…which is it? (Strictly playing devils’ advocate here, as I’m not entirely familiar with the issues at play, but it is of interest.)
Bit of both, isn’t it. The banks are being backed by governments but aren’t passing that largesse onto companies, especially small and medium sized enterprises.
Instead, as I understand it – and I’m far from an economics expert – they are hoarding cash and building up reserves to see them through the next bit of the crisis they’ve largely helped to generate.
Godwin’s law is what it is, but this must be presenting a great opportunity to extremist parties across Europe. I hope I’m wrong on that though.