Post Covers Up for Draghi

Most observers now recognize that the continuing financial crisis facing the euro zone is being deliberately extended by the European Central Bank (ECB). This is being done to force heavily indebted countries to make cuts in social spending and to weaken the power of labor unions. (Italy was required to change its labor laws as a condition of continued support from the ECB.)

The Washington Post decided to cover up the nature of the ECB's strategy when it told readers that:

"By withholding ECB relief for weaker European governments, he is keeping pressure on political leaders to make difficult choices needed to stabilize the euro currency."

The Post effectively defined the measures demanded by the ECB as being necessary to "stabilize the euro currency." That would perhaps be an appropriate stance for the ECB's public relations department. A serious newspaper should not be blessing policy decisions this way and misrepresenting a choice by the ECB as a necessity dictated by the market.

Coddling blackmail
written by Robert Salzberg, December 09, 2011 7:20 AM

The ECB is blackmailing all the countries on the Euro by allowing ever increasing interest rates on government debt. The weaker countries have no legal option to leave the Euro without permission and return to their own currencies except of course to embrace their inherent freedom to choose their own collective destinies.

The FED isn't much better. Imagine for a moment if it balanced low inflation targets with the second part of it's legal mandate, full employment.

The goal is labor laws
written by Peter, December 09, 2011 7:22 AM

Mr. Baker,

WaPo reported what is actually the truth.

Northern politicians goal is to get labor market reforms in Southern economies. That will keep nominal wage growth down for years, just like what happened in Northern countries during the last decades.

Cuts in social spending is far less the issue, than get those labor market reforms. The latter will make the Southern European economies more competitive. The first will not.

European politicians do understand that last point extremely well.

euphemistic spin in MSM
written by trish, December 09, 2011 11:46 AM

"difficult choices" has become synonymous with cuts to social programs in the MSM.
Same with "belt tightening."
However, never are these faux-moralistic stances directed at the financial elite whose interests the global Draghis are looking after.
WAPO is part of their constituency.

Translation
written by Bart, December 10, 2011 7:07 AM

The Post is correct: In ECB lingo, "stabilize the euro currency" means "spend less of it on the workers"

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