NATIONAL BANKRUPTCY

When I wrote the booklet “The Contemporary Countdown to Chaos” during the summer the spectre of national bankruptcy over Europe began to appear very menacingly. This last week, after two months of relative absence, it has returned with more menace than ever. Previously it had been confined to smaller countries like Iceland and Southern Ireland, now it is looming over larger countries, most notably Greece and even Italy.

I was utterly taken aback by stark reality of what was happening, "rich" European nations actually facing bankruptcy. When nations go bankrupt, there is no place to run to for help. They can be too big to “bail out”. Italy certainly is. Perhaps in the light of what I had written in the pamphlet, I should not have been taken aback at the development. But I was. It wasn’t so much that I was surprised as that I was appalled, appalled at nations so steeped in debt that they could no longer afford the interest on their debts; nations enjoying standards of living that they could no longer afford, whilst, at the same time, these standards were being perceived as basic “rights”, and civil disturbance was threatening. The “fall out” from the economic explosion of 2008 really was widely and very dangerously making itself felt. I suppose I knew it would happen, but it came none the less as sickening confirmation of the severe word of judgement which rests on the western nations.
This week there is a lull whilst the new Greek and Italian governments try to get organised, but the spectre will be back.

Whereas clear thinking and wisdom belong to God and are his gifts, confusion is always a mark of God’s displeasure, and confusion is so evident in the European leadership. It arises from a fundamental failure to know what really needs to be done with this collapse of solvency. Should solvent nations risk the “bail outs” that might well drag them under water? Are those “bail out”s simply throwing good money after bad? Is there sufficient money anyway for a big enough “bail out”? Even if the countries which need such help agree to put austerity measures into place, will those measures actually restore prosperity? There is, therefore, a veritable maelstrom of uncertainty and confusion facing European leadership, as it walks an uncertain road where it has not walked before.

We should not presume there is some easy economic answer to the problems, not even on the issue of what austerity measures should be imposed to restore economies. The very people who we might think ought to know the answer to that last question, the economists, are themselves divided. Even the IMF (International Monetary Fund) itself, with all its expertise, has destroyed economic growth in a considerable number of nations on which it has imposed restrictions that have proved too severe. So even the IMF has many and powerful critics. The truth is that pulling the economic levers to put a nation back on its feet is a very delicate process and a process for which there is no definitive text book. Thus getting the austerity measures wrong in Europe (and Britain) could do more damage than ever. The problem is not just an economic problem either. Austerity measures inevitably involve huge social issues of anger and discontent, making it a very difficult political problem. That has been immensely evident in the last week or so in the Euro-zone. Yes, confusion and uncertainty are everywhere.

All this gives me a deep sense of the European nations “hanging in the balance” before God. One feels the bottom could fall out. The scenario is a fearful one.

Bob




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