Prepare Plan B, Mr Rehn
Published 03/07/2011 | 05:00
Sir -- "There is no plan B" to rescue Greece, according to Olli Rehn -- or, one must deduce, to save any of the other delinquent borrowers within the euro. There had better be, because Plan A is gravely flawed and can only end in failure.
It is based on false assumptions. It treats the present crisis as a recession comparable to those of previous centuries, which has been aggravated by financial mis-management and which will be corrected by fiscal austerity and the panacea of recovery from all previous recessions: "growth". This is no recession; it is the manifestation of a changed world of production potential where surplus rather than shortage is the norm, where work is no longer required as it once was and where growth, apart from replenishment, is no longer an option in many "mature" economies.
The world has changed; Mr Rehn and his associates have not and do not acknowledge or understand this. Ironically, that change has the potential for a much better world; not the hell of desperation and hopelessness Plan A is delivering to so many. The unmanageable debt is the result of a failed attempt to force unnatural and destructive growth where it was no longer possible and replace lost work and earning power with easy credit. We have our own examples of the calamitous result of such misguided policies.