The  present predicament of the European economy, which is leading the entire continent  on the road of economic depression,  can be seen in a number of ways. Some European Countries are in debt to international – that is , basically American -  finance,  and the lenders require a steady increase of the rate of interest  in order to compensate the probability of a debtor’s default .

However, pushing  higher  and higher the rate of interest  makes sure that sooner or later the debtor countries will have to default ,  being unable to pay such an increasing  rate of interest  for their debt. Who runs this machine? The so  called “rating agencies”. These are private institutions, who, in  absolute autonomy, due to their  nature of privileged representatives of the USA, decide how high the  rate of interest has to be. These are the real controllers of the situation, and everybody else has to  react to their decision  without ever disagreeing with them.

For a moment, the European countries   have been  talking of creating an “ European  Rating Agency”, but the project  was soon  abandoned ,  in fear of  American  retaliation, and also because an European rating company would not be “neutral” towards the  debtor countries. It is not clear  whether the “neutrality” would have gone  in favour  or against the debtor countries. However, one thing is  certain : the American  rating agencies are not “neutral”. This  has been  visible over and over again.

A great American Bank  went bankrupt at the start of the big  financial American crisis, and  nobody  had    said a word. More recently, another big bank  has incurred into  losses  of which  it cannot  even quote the size,  and its “rating” did  not change;    actually everybody praised its boss, who cannot even give a number to its losses.  Of course , the rating agencies  have their own recipe on how the debtor countries  must   gather the money to pay their debts. and also  how to  improve its economic situation .  The proposal is to  change the economies of such countries : to privatize whatever economic activity is in the hands of the State, and to reduce not only the income  of the working force, including   the old   component , but also  its ability to defend their jobs .

The tax rate  on low and  average incomes should be increased, hitting the lower and the middle class, and  leaving  unscathed the higher incomes and  of course , the patrimonies.  All this  will increase the income differential among the population, a very risky policy, and  reduce the demand  of the largest part of the population, which will eventually have a negative effect on production. So, the way to get out of   such a  predicament is to enter into an economic  depression, and this is the present situation of Europe .

This recipe has been called the “Washington  Consensus “ but it must be said that a large part of the American opinion does not share it . In fact , the Obama Government has repeatedly proposed to Europe a completely different solution ,  that is, to stimulate the economy, in order to sustain aggregate demand. However, these solicitations have ben ignored by the Europeans, who seem to  have absorbed not what the American economist say , but rather what the  financial environment  is  proposing. That is,  that  the rate of interest on  debts   is to be calculated and revised every now and then, by the  lender himself