I agree with Joseph Stiglitz's take on the current EU banking crisis.
The current "Loan" packages for Greece , Ireland and Portugal are really part of a big bailout of big banks in Europe who were negligent in their lending practices. Of course there are many borrowers who went crazy in the boom and should take their medicine as well. But the primary responsibility for the mess must lie with the lightly regulated globalised financial sector who seem to be able to continue their grip on politics . After being given free rein to privatise their gains before the bust, they have cleverly socialised their losses in the form of bank guarantees and IMF/EU "loan" programs. Meanwhile austerity is preached for citizens in Europe.
Joseph Stiglitz describes the reality of previous bank bailouts in other continents and there is little doubt that he sees the present approach in the EU as a banking bailout. There is another way which involves a real commitment to make sure the failing economies can re-pay their legitimate debts. This approach involves real European solidarity, not just bailing out banks and hope the "market" will sort it all out in time.
This banking crisis presents is a real and critical crossroads for the European project. I hope Europe chooses solidarity.
I agree with Joseph Stiglitz's take on the current EU banking crisis.
The current "Loan" packages for Greece , Ireland and Portugal are really part of a big bailout of big banks in Europe who were negligent in their lending practices. Of course there are many borrowers who went crazy in the boom and should take their medicine as well. But the primary responsibility for the mess must lie with the lightly regulated globalised financial sector who seem to be able to continue their grip on politics . After being given free rein to privatise their gains before the bust, they have cleverly socialised their losses in the form of bank guarantees and IMF/EU "loan" programs. Meanwhile austerity is preached for citizens in Europe.
Joseph Stiglitz describes the reality of previous bank bailouts in other continents and there is little doubt that he sees the present approach in the EU as a banking bailout. There is another way which involves a real commitment to make sure the failing economies can re-pay their legitimate debts. This approach involves real European solidarity, not just bailing out banks and hope the "market" will sort it all out in time.
This banking crisis presents is a real and critical crossroads for the European project. I hope Europe chooses solidarity.
http://www.youtube.com/watch?v=NV-pVDztNuU&feature=player_embedded#at=14