5 People You've Never Heard of Who Are Screwing Up Europe
And the rest of the world
With the euro-crisis threatening the economies of Europe, the United States, and Asia, the usual suspects are coming up for blame. Bankers and corrupt regulators face scorn from the left and much of the right. Yet those perhaps most responsible for the world's dismal economic future have names many would not recognize. Indeed, the people who have done the most to screw up Europe would be able to walk down almost any street in the world without being recognised. It's time to meet them!
1. Pierre Moscovici, French Minister of Finance
France's relatively new government has been engaging in policies that seem perfectly designed for rapid economic collapse. Despite mountains of evidence to the contrary, the French government insists on pursuing policies that will impoverish one of Europe's major economies.
Moscovici, a former member of the Revolutionary Communist League, has had an important role implementing these changes. He has called for increased fiscal union, the introduction of Eurobonds, and he wants to grant more power to the European Central Bank. Because France wields a huge amount of influence in Europe, and with the eurozone collapsing, Moscovici's influence will become more apparent and dominant in the coming months.
Memorable quote (speaking at a previous European summit): "We made our first steps toward integration—a banking union, fiscal union, budgetary union and further on political union."
Next: A level of fiscal activism that would make Ben Bernanke blush.
2. Sir Mervyn King, Governor of the Bank of England
While the U.K might have avoided joining the single currency, it has been far from immune to Europe's crisis. In light of severely weakened trading partners and a recession in the UK, the Bank of England, with King at the helm, has engaged in a level of fiscal activism that would make Fed Chairman Ben Bernanke blush.
Although the British government has embarked on a so-called austerity program, the fact is that there has only been a decrease against projected spending while nominal spending continues to increase. It is only thanks to the inflation created by the Bank of England that Britain is enjoying modest real terms cuts of what will probably be between 3 to 4 percent over the next five years.
Memorable quote: "The creation of money by the Bank of England has helped offset what would otherwise have been an extremely damaging contraction of the money supply. In the Great Depression, the money supply in the United States fell by around one-third. In Greece, broad money has fallen by over 25% since the end of 2009. The consequences are self-evident."
Next: Giving central bankers a bad name.
3. Mario Draghi, President of the European Central Bank
Draghi has been one of the most influential players in the euro-crisis fiasco. Instead of allowing for the managed exit of certain countries from the eurozone, Draghi has consistently insisted on stimulus spending and fiscal activism.
Memorable quote: "…the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."
Next: You might want to re-read your Hayek.
4. Luis de Guindos, Minister of Economy and Competitiveness of Spain
Luis de Guindos has spoken against a sovereign bailout for Spain while discussing the possibility behind closed doors with his German counterparts. His position on Spanish spending is doubly complexing when one considers that de Guindos considers himself something of a fan of F.A. Hayek and the Austrian school of economics. While he has spoken out for the need for labour market reforms, de Guindos will almost certainly oversee the most damaging bailout of the euro-crisis after months of denial.
Memorable quote (when asked if Spain would need help from European lenders): "Absolutely not."
Next: Resurrecting the dead hand of Marx.
5. Alexis Tsipras, President of Synaspismos
A self-described socialist, Tsipras has helped turn Marxist economics into something worthy of serious consideration and something that is even seen as cool. An economic illiterate who doesn't seem to grasp that Greek membership of the euro is incompatible with more government spending, Tsipras has almost singlehandedly allowed for the reestablishment of a self-defeating political culture that caused many of Greece's current problems in the first place. He has even gone so far as to suggest that austerity could lead to war in Europe.
Memorable quote: "New tough austerity measures are insane and will lead us to bankruptcy and away from the euro zone."