'EU austerity to ignite chaotic unrest'
- Post 03 May 2012
- By PressTV
An economic commentator says the harsh austerity measures implemented in the Eurozone are likely to provoke massive protests in the bloc, which could be beyond the control of the ruling elite.
The comment comes as the eurozone unemployment rate has hit a record high in March, rising to 10.9 percent for the first time for 15 years, official figures show.
The European Statistics Office, Eurostat, announced on Wednesday that almost 17.4 million men and women, over three million of whom were under 25, looked for work in the zone in March which is about 170-thousand more compared to February.
The joblessness rate is the highest since the launch of the euro currency in 1999.
The figures are expected to increase pressure on the region’s policymakers to take more pro-growth steps along with harsh austerity measures they have imposed on their people to fix their debt crisis, triggering incidents of social unrest and massive protests in many European countries.
Press TV has talked with economic commentator Shabir Razvi, to further discuss the issue.
The following is a rough transcript of the interview.
Press TV: Putting this into perspective, 10.9 percent, a record high 15 years ago and of course that is on paper, so this may be a lot higher. Tell us what this means? And of course this bleak data what does this say about the future of the Eurozone countries at least for the second quarter is it going to keep contracting?
Razvi: Good Afternoon Kaveh, thank you very much. I think that the development that is taking place with the austerity measures is in most of the Eurozone countries and particularly in the UK, the whole attitude, the whole approach of the governments in the respective Eurozone countries is to punish the poor.
They really talk about austerity measures; in reality it is punishing the middle classes and the lower paid and at the same time, as you know, in UK in the recent budget, tax reductions were awarded to the very rich, with a five percent reduction in their pay pockets from the 50 percent to 45.
So as long as the governments in Europe continue to beat the drum of austerity measures, it will reflect in high unemployment because effectively what you see is that when there is austerity measures, the government is not spending money, the unemployment register increases, when people are unemployed they are unable to pay their taxes, they do not have enough money to buy products in the economy so it becomes a very circular situation and we the demonstrations in most of the European countries on the Labor Day, strikes in France, in Spain, in Italy, in UK and most of the other countries.
So the recession is really here to stay, I think, and all these measures which are being taken, the fiscal measures, the fiscal difficulties that are being faced by Eurozone countries will not go away by austerity measures.
This is not just [what] I as an individual economic commentator [am] talking about; most of the analysts, most of the fair-minded commentators are really talking about this particular issue, that the more we want to implement austerity, the more difficulties the Eurozone economies will face. There is no doubt at all in my mind about this.
Press TV: You talked about the Austerity measures, are we seeing there is going to be a negative spiral of these austerity measures in terms of it affecting, as you mentioned, the lower classes and the lower paid? Isn’t that a concern that the government should have?
We have seen the protests, but also are we being set up for example in the case of the UK where they officially came out and they said we are in a recession?
That they are going to either revise austerity measures to be higher in cuts or increase in cuts, perhaps that is their way of saying that this is what we’re setting you up for, at the same time not coming up with anything, showing any growth for the economy, which at this point is austerity measures undermining consumer confidence?
Razvi: Well, Moody, the credit agency only recently commented in their report that with the expectation of Olympics and also the jubilee celebrations that we are about to embark on, will not really jump start the economy.
So all the factors are showing that we are in for long term squeeze on the incomes of the lower paid and the middle classes and that is where the whole crisis is, sort of, leading us.
Whereby the ordinary workers, whether they are lower paid or even the middle classes are being squeezed very dramatically with their purchasing power reduced with inflation continuing in the manner that it is in UK, with reference to UK, particularly at four to five percent and salaries and incomes not increasing.
Therefore people do not have sufficient money to really have a living which is virtually on the bread line because a lot of people are just living from month to month, really, worrying about what will happen next month.
And I just want to, sort of, look at the whole situation in UK; 200 years ago we had a monarch who was George IV and he was in 1812, exactly 200 years ago, was having a quail party.
And similarly our ruling aristocrats, the queen and her, sort of, family will be inflicting expenses on this particular nation when we can’t afford by having these Jubilee celebrations where the ordinary people will not have enough food on their table, while rich and the wealthy will be enjoying parties and celebrations and so on.
So really in the last 200 years it seems that nothing much has changed in the United Kingdom. The rich and the wealthy are getting away continuously for a very long time and this will, I think, lead to problems in society, which I have previously commented that we are living through a phase at this moment whereby the pressures on the ordinary people will ignite something, which the ruling elite may not be able to control.
MY/VG/JR
Source: PressTV
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