The Real Crisis for Spain and Greece.

   In the Jun 6th issue of Nation Magazine, Mark Weisbrot has a piece called SOLVING THE EURO CRISIS.  He explains that the real problem for Spain, Greece, Ireland, and Portugal, is simply that they are stuck in a deep recession, but their ties to the European Currency Union have not allowed them to follow the expansionary policies required to get out of that recession. Right now Spain has over 20% unemployment,  and if all of those people were working and paying taxes, there would be no problem.  Since the collapse of the bubble, (a collapse that none of these countries had anything to do with) most other countries have had either an expansionary monetary policy or a fiscal stimulus, or both.  The US Fed has created over 2 trillion dollars since the recession began.   And some countries have depreciated their currency to help their export industries.   But the European Central Bank is far more conservative than the Fed, and is committed to a strong Euro and balanced budgets. So the budget cuts which the ECB, the IMF, and the European Commission are demanding of these countries will only make the recession worse.  Their only hope is through increased exports, but since they are tied to the Euro, there is not much they can do on this front.  And considering the sluggish pace of the recovery everywhere,  the odds that exports will increase anytime soon are dim.
    Interestingly, the Wall Street Journal on Jun 8th has a piece by Richard Barley, Euro-Zone Cuts Face World of Pain, in which he says  the same thing.    It is pretty rare for periodicals as far to the left as Nation, and as far to the right as Wall Street Journal to agree on any kind of economic analysis.  But they both agree that the austerity being imposed by the IMF and the ECB will only make things worse.