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London Review of Books: Vanity and Venality

Author: Susan Watkins
August 29, 2013

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"All quiet on the euro front? Seen from Berlin, it looks as though the continent is now under control at last, after the macro-financial warfare of the last three years. A new authority, the Troika, is policing the countries that got themselves into trouble; governments are constitutionally bound to the principles of good housekeeping. Further measures will be needed for the banks – but all in good time. The euro has survived; order has been restored. The new status quo is already a significant achievement."

Seen from the besieged parliaments of Athens and Madrid, from the shuttered shops and boarded-up homes in Lisbon and Dublin, the single currency has turned into a monetary choke-lead, forcing a swathe of economies – more than half the Eurozone's population – into perpetual recession. The Greek economy has shrunk by a fifth, wages have fallen by 50 per cent and two-thirds of the young are out of work. In Spain, it is now commonplace for three generations to survive on a single salary or a grandparent's pension; unemployment is running at 26 per cent, wages go unpaid and the rate for casual labour is down to Ä2 an hour.

Italy has been in recession for the past two years, after a decade of economic stagnation, and 42 per cent of the young are without a job. In Portugal, tens of thousands of small family businesses, the backbone of the economy, have shut down; more than half of those out of work are not entitled to unemployment benefits. As in Ireland, the twentysomethings are looking for work abroad, a return to the patterns of emigration that helped lock their countries into conservatism and underdevelopment for so long. Why has the crisis taken such a severe form in Europe?

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