![\"\"](\"https:\/\/billmitchell.org\/blog\/wp-content\/uploads\/2018\/10\/Eurozone_GDP_Growth_1995_June_2018.jpg\")
<\/a><\/p>\nThe next graph shows unemployment rates for the same nations since the March-quarter 2000. Germany is the outlier.<\/p>\n
The other major Eurozone nations have failed to reduce their unemployment rates by any significant degree relative to where they were before the crisis began.<\/p>\n
Italy still has 10.6 per cent of its active labour force without work (and it is worse when we consider broader concepts of labour underutilisation.<\/p>\n
So what would a responsible government do in this situation?<\/p>\n Answer: totally unambiguously, increase its fiscal deficit to stimulate new growth, particularly in employment rich sectors.<\/p>\n The Financial Times editorial (October 1, 2018) – Italy’s political leaders are playing a dangerous game<\/a> – is representative of the hysteria that has accompanied last week’s announcement by the Italian government that it was increasing the fiscal deficit target to 2.4 per cent of GDP.<\/p>\n It carried a sub-heading “Fiscal irresponsibility and defiance could deepen Rome’s troubles”.<\/p>\n We read that:<\/p>\n \nThere are real and serious risks, stemming as much from Rome’s attitude and behaviour as from the actual economic targets. Italy’s previous government committed last year to bring down its fiscal deficit to 0.8 per cent of gross domestic product by next year and gradually turn it into a surplus in the two years after that.<\/p>\n While few thought this target was credible, the 2.4 per cent deficit the government signalled late on Thursday is way above the kind of figure the EU or the markets could reasonably live with. That ratio, moreover, would be sustained, not decreased, over the two following years. Rather than helping reduce Italy’s public debt – the eurozone’s largest, as a percentage of GDP, after Greece – the draft budget calls for potentially unsustainable spending. By the time these plans reach Brussels for formal approval, the targets may have grown looser still.\n<\/p><\/blockquote>\n Which makes you wonder what the Stability and Growth Pact (SGP) is all about.<\/p>\n The allowable threshold is 3 per cent of GDP. And Italy has been in breach of the 60 per cent debt target for years so it is ridiculous to start imposing sanctions as a result of that on-going departure from the rules.<\/p>\n Once could argue that a 2.4 per cent deficit is way below what is needed. Way below, given the sort of economic performance summarised in the two graphs above.<\/p>\n The Financial Times claims that if the European Commission (and the Finance Ministers) were to accept Italy’s new fiscal plan they:<\/p>\n \n… would be condoning truculent behaviour and economically misguided objectives.\n<\/p><\/blockquote>\n And that is why the Eurozone is so dysfunctional.<\/p>\n Truculence is now defined in terms of trying to grow an economy that is already around 6 per cent smaller than it was 10 years ago.<\/p>\n While the bond markets were pushing up yields on Italian government debt this morning, the reality facing the Eurozone is that the ECB will have to entere the markets and buy up Italian government debt, just as they did in 2012.<\/p>\n If they don’t then there will be a major financial crisis which will threaten the Eurozone viability.<\/p>\n I hope the Italian government doesn’t buckle under the pressure and pushes their national interests and ignores the pressure from Brussels.<\/p>\n That will force the ECB to intervene and use its currency-issuing capacity to stabilise Italian government yields.<\/p>\n It has the bargaining power here. Whereas Greece was too small and succumbed to the bullying by the Troika, Italy is such a significant part of the Eurozone economy that it can call the shots if only it dares.<\/p>\n As the Financial Times editorial noted, the planned additional spending by the Italian government will:<\/p>\n \n… undoubtedly be a boon to struggling Italians …\n<\/p><\/blockquote>\n And that says it all really.<\/p>\n The financial markets, aided and abetted by Brussels, want things on their terms, which are clearly detrimental to the interests of the Italian people.<\/p>\n The Italian government has a responsibility to defend the interests of the Italian people.<\/p>\n The Eurozone is structured to advance the aspirations of capital and undermine the responsibility of the elected Member State governments.<\/p>\n That violates democracy and is a recipe for long-term failure.<\/p>\n I will write more about this as the drama unfolds.<\/p>\n I hope the Italian government holds its nerve.<\/p>\n Wednesday, October 3<\/strong> – Galway – Reclaiming the State Workshop<\/em> – Harbour Hotel, New Dock St, Galway.<\/p>\n Time: 20:00.<\/p>\n The event will be chaired by Professor Terence McDonough.<\/p>\n Organiser: Desmond Greaves Annual School<\/a>.<\/p>\n Contact: Kevin McCorry – post@greavesschool.com<\/p>\n Thursday, October 4<\/strong> – Dublin – Reclaiming the State Workshop<\/em> – at Wynn’s Hotel, 35-39 Abbey Street Lower, North City, Dublin 1, D01 C9F8.<\/p>\n Time: 20:00.<\/p>\n The event will be chaired by Dr Karen Devine from Dublin City University.<\/p>\n Organiser: Desmond Greaves Annual School<\/a>.<\/p>\n Contact: Kevin McCorry – post@greavesschool.com<\/p>\n Friday, October 5<\/strong> – London – Launch of the The Gower Initiative for Modern Money Studies<\/a> portal.<\/p>\n Event Time: 12:30 to 19:15<\/p>\n Location: The Diskus Lecture Theatre, Unite the Union, 128 Theobalds Road, WC1X 8TN London.<\/p>\n Registration for the Launch is from 12.30 for a 13.00 start.<\/p>\n Afternoon seminars\/workshops:<\/p>\n 1. An introduction to Modern Monetary Theory (MMT)<\/p>\n 2. The Job Guarantee. <\/p>\n Registration for the workshops is from 1600 onwards for a 1630 start.<\/p>\n There are a limited number of places. The launch is free, seminars have a nominal charge of \u00a37.50. Booking is separate for the two sessions. Refreshments will be available.<\/p>\n At the Launch, I will be joined by Randeep Ramesh, Chief Leader Writer for The Guardian, who will he talking about the role of our media in shaping our economic narrative.<\/p>\n Sunday, October 7<\/strong> – Lisbon – Details to follow. I will be talking about the Job Guarantee and UBI.<\/p>\n Saturday, October 13<\/strong> – Wurzburg, Germany. Makroskop event.<\/p>\n I am on a panel at 13:15 with Heiner Flassbeck and Martin H\u00f6pner – topic Exchange rate regimes<\/em><\/p>\n Location: Tagungszentrum Festung Marienberg, Oberer Burgweg 40, 97082 Wurzburg<\/p>\n The workshop runs from 9:00 to 18:00 with several speakers discussing aspects of currencies.<\/p>\n Contact: rsvp@makroskop.eu for details.<\/p>\n The fantastic US guitar player and singer\/songwriter – Otus Rush<\/a> dies on Saturday (September 29, 2018) at the age of 84.<\/p>\n Here is an NPR report of the death (September 30, 2018) – Otis Rush, Chicago Blues Legend, Dies At 84<\/a>.<\/p>\n<\/a><\/p>\nMy current UK\/European speaking schedule – update<\/h2>\n
Otus Rush dead<\/h2>\n