Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Thursday, May 10, 2012

Europe At Risk Of A 'Lost Decade' Of Lower Economic Growth, Bank Says

AMSTERDAM, May 10 (Reuters) - Europe is at risk of a Japanese-style "Lost Decade" of low economic growth, weak consumer spending, poor company investment and tougher borrowing conditions, the Dutch central bank said on Thursday.

It said in a report there were some similarities between Europe's current situation and Japan in the 1990s, when the latter suffered from a troubled financial sector and reduced private sector spending.

"Now that the risk emerges that Europe also faces a 'Lost Decade' of low economic growth, the Japanese experience offers important insights," the central bank said in its semi-annual risk report on the Dutch financial sector.

Japan's situation showed the need for the central bank to aggressively fight deflation, and let banks take credit losses quickly, the bank said, adding that fiscal stimulation did not offer a way out of low economic growth.

The bank, which is led by Klaas Knot, who is also a European Central Bank governing council member, said the risk of a double dip recession had become reality in Europe.

The ECB's three-year money operations to banks had averted acute liquidity risks but problems in the Dutch banking sector and euro zone remained.

"Especially peripheral countries are vulnerable because of weak government finances, a fragile banking sector and weak economic performance," the central bank said.

"The European banking sector is not succeeding sufficiently to regain market confidence and is too dependent on central bank funding," it said.

Weak European banks needed to reform, and some banks might need to be restructured, the bank said, adding that Dutch banks and insurers needed to raise capital buffers, for instance by holding profits or issuing new shares.

Original Article
Source: Huff
Author: Reuters  

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