It is often said that travel broadens the mind. Not so for finance ministers gathering in Washington DC this week for the spring meeting of the International Monetary Fund and G20. For them, the agenda will seem wearily familiar.
Like a bad penny, the eurozone debt crisis keeps returning, seemingly deliberately to coincide with these international summits. Spain’s rapidly deteriorating economic and financial position provides the flash point du jour.
With yields on Spanish government debt again above 6pc, and a couple of crucial bond auctions looming, matters are once more coming to a head. Crushed by repeated austerity programmes, the big southern European economies are sinking back into recession, raising new doubts about their ability to meet fiscal targets.
Discussion will therefore once again focus on the creation of a firewall big enough to provide for more, and even bigger, eurozone bailouts, including Spain and possibly Italy, too. This is proving both difficult to achieve, and misses the point, for it presupposes that the crisis is at heart just a confidence issue that can be solved simply by creating a backstop large enough to convince markets they cannot break the euro.
Comment: “Hmmm…. why is the west in so much trouble in the first place. All these decades of government programmes, promising pensions, health, education, jobs, all of it. All those wonderful words spilled like buckets into the ocean. Alas, where has it gotten the people who believed it? Ahh…. the debt…. the crisis… the fears. And what of those who made these promises? What’s become of them? Oh, university posts, think-tanks, boards of directors. How very nice for them. Lie, make a mess, sow discord and deceit. Then off to Tuscany or Hawai’i to enjoy the sunshine. Perhaps, although it’s doubtful, people will one day see this charade for what it is, a great, big, lie designed to keep the proles pulling the yoke for the collective masters.”