You are greatly mistaken if you think Europe’s woes to come will be caused by a liquidity crisis. It is in fact a solvency crisis that poses an imminent threat to many members of the Union who don’t really need their funding costs to decrease, but who are desperately in search of transfers and even cancellations of part of their debt. They also don’t need us to even contemplate mentioning the banking union or the European Stability Mechanism that was concocted following the crisis from 2010 to 2012, because this simulacrum that is financial “integration” only highlighted the political insufficiencies and the absence of political credibility in Europe. Whatever the case, without wanting to keep dwelling on the past – if only because I’ve commented on this in hundreds of analyses – the situation is now turning out to be much more worrying because the public debt of a country like Italy is now reaching 150% of its GDP. These figures, in reality, only demonstrate the world’s new post-corona normal with – and it’s the IMF predicting it – so-called developed economies’ average debt now in the way of 125%, which is worse than the abysses reached during the Second World War for certain countries.
Under these conditions, the opportunity really is wonderful: the deficit fetishists and other pseudo-economists, who follow the aloof ordoliberal principle that the government budget must be managed like that of a household, now have a long road ahead of them. Their moralising and their blood-sweat-and-tears exhortations blithely neglect the fact that this analogy is totally fallacious, with the EU being in no way dependent on foreign debt and granting itself the luxury (that alas many emerging nations do not have) of printing its own currency. These prophets of doom for Europe, that is collapsing under the weight of debt, are living in a destructive denial and taking no heed of the fact that our economies are collapsing…precisely because of our monetary sovereignty and this precious and envied financial independence that allows us to get into debt with our own fellow citizens first. This oppressive prism of morality that certain European countries categorically refuse to move away from does in fact demonstrate a mentality close to slavery, where they strive to subjugate their populations while we – us Europeans just like the Americans and Japanese – are not in any sort of position of inferiority or subjection to whoever it might be, because we only owe money to each other.
Let us therefore monetise and finance ourselves thanks to the driver that is monetary creation, while backing an inflation that will be welcome to lighten the burden of this debt. Wasn’t this exactly the path chosen by the US and Europe to fund the reconstruction efforts after World War II? The world after the coronavirus therefore depends on us and our determination, as well as our rejection of these debts being paid back via reductions to social programmes, increasing the retirement age, budget cuts to education and defence, increases to VAT etc. Nothing but a burden, public debt must be transformed – through the mobilisation of the most sensible – into fireworks that will ignite our economies and make them dynamic once more, because the life of a government is by definition unlimited and it can regenerate itself tomorrow.