Europe eases

Dennis R Redmond dredmond at OREGON.UOREGON.EDU
Fri Dec 4 01:59:47 PST 1998

On Thu, 3 Dec 1998, Doug Henwood wrote in re the euro rate cuts:

> Keeping speculative capitals afloat, keeping capital from fleeing Brazil,
> and giving an inch or two on European unemployment. I wonder how likely it
> is that there'll be pressure in Europe to ease the Maastricht fiscal
> criteria.

A dead certainty, I'd say. In the Maastricht Treaty, the 60% norm isn't actually written into the main body of the text, it's in a reference section in the back, and all references to it refer politely to "the reference criteria" (very Lacanian, somehow). Possibly the Christian Democrats who wrote the damn thing were less stupid than they looked. More to the point, the most recent revision of Maastricht, the 1997 Amsterdam accords, mandated a big push in the activity of the European Investment Bank as compensation for declining infrastructure investment. A lot of this fresh credit has been channeled to Spain, Ireland and Greece, nicely propping up effective demand in the semiperiphery; more is on the way to Eastern Europe, too. The neat thing about EIB funny-money is that it's triple AAA quality, and guaranteed by the national Governments of the EU, but it doesn't show up on their national deficit total. The situation is just perfect for a mongo trasho euro spending/bailout splurge.

-- Dennis

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