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“Future of the Euro Zone Looks Pretty Dim”


“The future of the Euro zone looks pretty dim unless primarily Germany changes its stance”, says Noam Chomsky. Germany was forgiven its huge debt by European countries after World War II so it could grow its way out of the crisis and became the major industrial center of Europe. Now Germany is in the lead in trying to prevent similar policies. “Austerity is no way to get out of a crisis, it just makes it worse”. Even the International Monetary Fund has pulled back from it. Meanwhile the famous article of the Harvard economists Reinhart and Rogoff which was used as the intellectual foundation of the austerity programs turned out to be flawed. “Deficits do in fact provide and stimulate demand. (…) Overcoming deficit is not a problem. It´s a problem for the banks and therefore it´s the center of the political debate because of their political power.” But for the population polls show the problem is jobs. “The lack of jobs is destroying a whole generation with all kinds of consequences for the future. In Europe it is even worse. And it is also harming the economy. A huge amount of potential growth is being destroyed because we have to worry about the non-existent threat of inflation.” The public just has less and less say when it comes to neoliberal policies, social cuts and free trade. “It´s not irreversible and there is plenty of protests. It might crystallize into popular movements which will compel serious changes. But it´s a long way to go and Germany is in the center of it because of its power.”

Noam Chomsky: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> Welcome to Kontext TV. Our guest is today MIT-Linguist, US critic, dissident and activist Noam Chomsky. Chomsky is supporter of Kontext TV. Three years after the last interview with Kontext TV we again got the chance to talk to him.

Fabian Scheidler: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> One of his most popular books is „Manufacturing Consent. The Political Economy of the Mass Media“, written in 1988, in which Chomsky and the political scientist Edward Herman developed a model on how propaganda works in modern and free societies. Other books of Chomsky are “Hegemony or Survival”, Profit over People”, “9-11” and “Occupy”.

Fabian Scheidler: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> Welcome to Kontext TV, Noam Chomsky.

Noam Chomsky: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> I want to talk about the Euro crisis. Austerity measures have been applied to several countries like Greece, Portugal and Spain. The German government is in the lead of this policy to cut wages, to cut social security, to privatize state-owned companies. What is your assessment of this policy and what is the future of the Euro zone in your view?

Noam Chomsky: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> A student corrected it.

Noam Chomsky: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> Obama also wants to cut social security like Medicare.

Noam Chomsky: line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”> It seems that free-trade negotiations between the United States and Europe could start by June this year. It would be the largest free-trade deal ever. In the US you already have NAFTA and several other free-trade agreements. There are also talks about of a US-Middle East free-trade area. The EU has recently signed free trade agreements with Peru and Colombia among others and pushes economic partnership agreements with countries of the African, Caribbean and also the Pacific Group of States. What is the strategy behind free-trade enforced by the United States and European countries?

Noam Chomsky: