Economics in 2012: no gain, just pain as austerity brings misery to all

Monday, January 2, 2012
By Paul Martin

With the eurozone on the brink of a new recession, this will be the year when millions of people bear the brunt

Heather Stewart
Sunday 1 January 2012

The fluctuations of the financial markets and the relentless round of make-or-break euro-summits gripped the attention in 2011, but this will be the year when the shockwaves are felt by millions of people in Europe and beyond.

Throughout 2011, the language of bond yields, AAA ratings and credit default swaps leapt from City trading floors into everyday chit-chat as the eurozone crisis spiralled out of control.

Instead of answering first to their electorates, Europe’s politicians became fixated on sating the demands of anxious investors in the bond markets for ever more drastic spending cuts. Preventing Italian bond yields from topping 7%, and protecting France’s AAA credit rating became central policy aims.

But reducing the eurozone’s malaise to numbers flashing on a screen only served to mask the fact that millions of livelihoods were at stake in what the technocrats call the “real economy”, but most of us would call real life.

The policy of collective austerity imposed at the behest of the money men has driven the eurozone to the brink of a new recession. In 2012 it will be swept over the edge, carrying with it the jobs of millions.

It’s hardly surprising people became increasingly angry as they watched policymakers fail so comprehensively to protect them from the lash of the speculators. From the street sit-ins of Greece’s Indignati, to the thousands of young people who gathered in Puerta del Sol square in Madrid to demand a stake in their country’s future, the public expressed their exasperation.

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