European Capitalism: Varieties of Crisis

21 03 2012

By Ingo Schmidt

In the midst of the 2008/9 crisis of the world economy (European Commission 2009), a new term crept into financial parlance: PIIGS, short for: Portugal, Ireland, Italy, Greece, Spain. At that time, the broader public was still trying to understand the meaning of CDOs (Collateralized Debt Obligations), CDSs (Credit Default Swaps), and other fancy financial products including their role in the financial crisis. Governments and central bankers were busy working to contain a sharp recession and save private profits with huge infusions of zero-interest credit, government spending and bank bailouts. As a result of these efforts, the crisis of private finance and capital more generally was transformed into a fiscal crisis of the state. Neoliberal economists and media pundits happily used their chance to point at rapidly rising levels of public deficits and debt but downplayed the share of bank-bailouts in rising deficits. At the same time, they constructed the PIIGS to show how spend-thrifty governments run the risks of capital flight and state bankruptcy. READ THE ARTICLE >>


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