by Guy Brandon
The period of relative calm surrounding the future of the Euro abruptly came to an end last week. Francois Hollande was elected as the next president of France, replacing Nicolas Sarkozy. The change represented a shift away from austerity towards an emphasis on growth, something the markets have read as code for stimulus based on further borrowing. Worse, the Greek elections produced no clear winner and efforts to form a coalition have so far failed, raising the prospect of further elections next month. The only certainty in this situation appears to be that the Greek people have rejected those parties advocating austerity, thereby jeopardising further bailout payments to the country and prompting open speculation about whether Greece will default on its debts and leave the Euro. Meanwhile, the Eurozone economy recorded zero growth for the first quarter of 2012.
The Jubilee Centre's most recent book, After Capitalism, is based on a series of Cambridge Papers by economist Paul Mills and Jubilee Centre founder Michael Schluter. Starting from a biblical worldview, they unpack the flaws inherent in unrestrained capitalism and offer some analysis of and solutions to our current economic predicament - including a critique of the Euro just before its inception in January 1999. (The paper concludes, 'Our greatest concern is that EMU [European Monetary Union] cannot work without substantial political and economic centralisation... The clear inference is that either EMU will break up in a costly and acrimonious way, or that sovereignty over national fiscal policy will have to be sacrificed - first by mutually guaranteeing other governments' debts and then by agreeing to large-scale fiscal transfers to regions in recession. This in turn will require a much higher degree of political integration.')
It is unclear how or if the Euro experiment will end, but this book offers some prescient insights into what went wrong and how the Bible might offer a different economic model.