Last week, Eurostat released it updated data covering people who are at risk of monetary poverty. In the press release/news page (February 26, 2018) – Almost half the unemployed at risk of monetary poverty in the EU – we learn that 48.7 per cent of unemployed persons in the EU “were at risk of poverty” in 2016, even “after social transfers” were taken into account. The situation has deteriorated significantly since 2005 as a result of the impacts of the GFC and the policy response taken by the European Commission and the Member States (under the EC’s thumb). While the usual suspects perform badly on these indicators (Spain, Greece, Italy), a stark result is that 70.8 per cent of German unemployed persons are at risk of poverty. This proportion has jumped from 40.9 per cent in 2005 (a 29.9 percentage point shift). So, even in the strongest Eurozone economy, the policy frameworks are delivering terrible outcomes. Increasing divergence and inequality and rising social exclusion are the most striking characteristics of the 13 years of European Union history since 2005. It doesn’t look like a policy bloc that any sensible nation should aspire to be part off (or remain within).

I have been doing some research on Brexit. I vowed to stay clear of the topic because of all the stupidity surrounding it from both sides, but most galling are the Labour Remainers who think the European Union is some sort of nirvana (with a few problems) and is on the road to redemption through some amorphous ‘reform’ process. Pigs might fly! I mentioned the recent publication by Open Britain (January 30, 2018) – Busting the Lexit Myths – in yesterday’s blog. This document seeks to state the case for British Labour’s “Campaign for the Single Market”. The ‘single market’ is held out as some sort of security blanket for all and sundry. Without it, Britain will apparently lapse into a state where the government will be unable to maintain services, where “genetically modified foods, chlorinated chicken, and access to procurement of protected sectors like healthcare” overwhelm the local economy, where environmental and working standards disappear and that hapless island floats off into a shocking dystopia. It is really the stuff of fantasy. But the image it evokes of the confidence in British democratic systems and its own capacity for volition is quite stunning. Without the EU, Britain becomes hapless. You laugh then cry. Pathetic.

When the latest Greek bailout deal between the Greek government and the European Commission/IMF) was concluded on June 16, 2017, I concluded that it was designed to fail. Please read my blog – Latest Greek bailout – a recipe designed to fail. Despite all the statements from the European Commission and the IMF to the contrary, the terms of the deal with the Greek government confirms that these institutions had abandoned any pretense to being interested in serious economic policy. For the European Commission, the desired irrevocable status of the euro, as a political statement, is all it seems interested in when it comes to Greece. They just don’t want to admit that Greece cannot reasonably function in this monetary union. This deal only stalled reality for yet another day and the only goal it serves is to keep Greece using a currency it cannot afford to use. And now the reality is emerging that the Greek economy will need a further bailout to survive for another period. The latest analysis from the German research group – Centrum für europäische Politik – shows that Greece remains close to insolvent and cannot survive within the Eurozone on its own. One has to ask what has all the austerity been for if the patient is still on life support some 10 years later. We know the answer.

During the crisis, I traced the evolution of the Irish economy. It was clear that the nation took a very big hit in the downturn – between 2007 and 2010 the economy shrunk by 15 per cent. Evidence also makes it clear that before the crisis, the narrative about the so-called Celtic Tiger miracle ignored the fact that a substantial portion of the growth was captured by foreign interests such are the taxation arrangements that attract foreign companies. Ireland also benefitted substantially from the growth in China and the US, and then the UK, all products of extended fiscal deficits. More recently, the impacts of the global tax structures and accounting nuances have significantly distorted the growth estimates for Ireland. In that context, to avoid becoming a laughing stock, the Irish Central Statistics Office (CSO) initiated a review of its national accounts framework and have now started to produce modified estimates of Gross National Income and some of the affected expenditure aggregates (Gross Fixed Capital Formation), which provide a very different picture indeed. While the official data suggests that the Irish economy grew by 39.7 per cent between 2007 and 2016, once the modifications were made to eliminate the distortions arising from these extraordinary global capital shifts, the Modified Gross National Income measure showed growth of only 12.2 per cent. In fact, the Irish economy in total is only 68 per cent the size that the GDP data would suggest – around a third smaller. Further, the modified Gross National Income series has barely grown since the crisis indicating that the Irish population has not received much in return for the hardships the austerity has inflicted upon them.