The non elected decisional centre of E U believes that inflation is either the real threat or the very instrument to get growth. It is a fake policy and European citizens should demand some form of democratic control over nor elected public figures.
The problem is , of course, inflation, which should not go beyond two per cent , as decided by the democratic rule of the European Bank. The objective is called Economic Stability. Stability, however, does not exist in economics . Stable means “still” ,“not likely to change” and if the economy stays still its cycle will take a negative slant and the people will be poorer .
Moreover, the European Bank’s simple rule does not consider the origin of inflation . The present increase of the price of oil is clearly not the result of excess demand, but rather the result either of speculations on the futures market (by people who do not need economic growth ) or of revolutions, or , possibly, of high demand in the East . In the same way, the increase of food prices originates mainly from the vagaries of nature in faraway countries , that is , excess cold weather in certain areas , and not enough rain in others, and also from competition between food and cultivation for “green” energy sources. Presently , European demand is almost stagnating , and prices go up for reasons that have nothing to do with its development , or ,rather, stagnation .
Immediately before that, Europe has condemned a few of its member countries to repay their Bank’s follies by reducing to zero the economic growth of the country. However, you can’t reduce public expenditure in poor countries, slow down their economies , and then expect they to pay back their debts , or their Banks’. The only reasonable hope for such payments rests on reviving the economic growth of the area . To push the matter to a paradox , one could say that the only thing you can do to help a poor, indebted country is to finance its investment projects , if any, which would foster economic growth.
The idea of fighting inflation to get stability - i.e. no growth- could perhaps be acceptable to rich countries, but Europe has welcomed in its structure a number of countries , and rich they were not. When that happened, Europe’s enlargement was correctly hailed as the best political operation of the Century. So it may be, but we cannot consider Europe a rich boy environment , as it is an area of strong differences , with many countries at a much lower level compared with some of the original members. This reality should not be ignored. If it is ignored , the risk is not only that some of the poor will became poorer , but that the global demand in the Euro area will nor be enough even for a relatively low growth.
Of course , the Americans are trying to do something similar to that, or , possibly, better than that . Under the flag of the balanced budget, their right wing wants to reduce public expenditure and public services. This wing represents the rich and the powerful , who are perfectly sure that the poor will be kept in harness by the media - fully owned by them- and do not care if the economy doesn’t grow- they don’t need it. They don’t need the voters , either . An extreme right wing party has been created in few months, and it is still growing.
Europe has probably not forgotten the meaning of Democracy , which postulates a limited disparity among citizens, the State budget being the instrument to reduce , through public services and support, the misery of the poor. However, they are trying to reduce public expenditure. Nor is it renouncing Democracy. But there is in the European construction an inner core of not elected politicians who do not actually need to be elected.
The non elected decisional centre of Europe believes that inflation is now the real threat , and has decided to increase the cost of capital to slow down an economy that grows about two per cent a year. The fact is that Europe is not developing, it’s stagnating , and it’s loosing the race with competitors new and old, who are stealing its place . The USA are now growing more than Europe , and there is no need to write here the numbers of the new giants from the East, everybody knows them. It is quite interesting to see that England is the European Country growing at a lower rate , the very one that has embraced a strict policy of retrenchment , and of dismantling public services , in order to enlarge the gulf separating the social classes of the country .
The problem , it seems , is not limited to economic policy. It is also about who has the power to decide. It would be about time that the European citizens demand some form of democratic control over nor elected public figures, who do not even try to explain what they are doing and what consequences will come from their decisions.