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Theguardian: The US can teach Europe a thing or two about financial crises

Theguardian: The US can teach Europe a thing or two about financial crises

four brown desks inside room

The US model of capitalism is deeply flawed. It is highly unequal, and an inadequate welfare system means that millions of people are either living in poverty or constantly teetering on the edge. Citizens of the EU have it cushier, with more generous pensions, unemployment pay and in-work benefits.
Last week saw yet another can-kicking exercise by EU leaders, who have been at odds for weeks over whether to issue common bonds in response to the economic devastation caused by Covid-19. The matter now looks as if, with luck, it might be finally resolved in early June, but that’s a long time in the current circumstances.
Delay is potentially disastrous, for two obvious reasons: the parlous state of the EU economy requires an immediate coordinated response; and the lack of unity puts at risk the goal of ever-closer union.
It is not as if the countries that are blocking the mutualisation of debt through coronabonds are doing especially well. The latest survey of German business sentiment was dire, and the outlook will remain so until there is a pick-up in demand for the country’s exports. This, though, does not seem to have forced Angela Merkel to rethink her opposition to coronabonds, which remains resolute whatever the circumstances.
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