Boy, you can’t help but
feel for ordinary European citizens who, by no wrongdoing of their own, are
being subjected to such upheaval in their lives that the term “economic
suicide” has been coined for people who choose to end those lives
prematurely in response.
All the while, policymakers are
about to enter their fourth year of dithering, refusing to allow debt to be
written off and, instead, subjecting a whole continent to more of what
they’ve delivered since late-2009 for what is increasingly understood
to be a currency that is now “dead” in most senses of the word.
These points are driven home
today in these two excellent reports:
In the first, a few of the
thousands of economic suicides that have occurred in Greece are detailed:
Antonis Perris, a musician unemployed
for more than two years, was desperate. Perris wrote in an online forum late
one night that he had run out of money to buy food and cursed those
responsible for the economic crisis in Greece. “I have no solution in
front of me,” he typed.
The next morning, Perris took the hand of his ailing 90-year-old
mother. They climbed to the roof of their apartment building and leapt to
their death.
The double suicide, in a working-class neighborhood in the Greek
capital in late May, is just one incident among thousands of suicides this
year that have shaken European societies as mounting job losses, cutbacks in public
services and shrinking government pensions due to the continent’s
financial upheaval take a toll on mental health.
If this were bankers jumping out
of windows instead of ordinary people taking their lives, it surely
wouldn’t be so bothersome, but, it’s not and when considering how
the common currency has already lost many of the qualities that make it a
currency as recounted by Matthew Lynn in the second article, it all seems so
pointless.
The euro could stagger on from crisis summit to emergency bailout for
another decade. Then again, it could be gone by the end of the month —
if Greece is refused its third bailout, the country may be kicked out, and
the entire currency could unravel over the course of a few chaotic days.
In reality, whether it is a few months or a decade away does not make
as much difference as you might suppose.
Why not? Because in most of the ways that actually matter, the euro is
already dead.
It no longer meets most of the criteria of a working form of money. There is
an important point in that for investors. It is right now — while the
currency no longer lives but still staggers on like a zombie — that the
euro is wreaking most havoc on the countries of Europe. Once it is finally
taken apart, markets in those nations can start to recover —
potentially very rapidly.
They really should just get on
with it. Kick Greece out of the eurozone or let
Germany take northern European countries and form a northern currency block so
that a southern euro can depreciate by about 50 percent and at least the
Greek tourism industry can get a little boost. As it is, this is just
“death by a thousand cuts” that, unfortunately, will probably go
on for years.
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