Strikes in Spain, dissent in Greece. The noises of protest are becoming all too familiar in Euroland, as people complain about the policies their governments are following. Euroland as a whole is in double dip recession.
Euroland democracies no longer function well. Voters can change the people in office, but they cannot change the main economic policies. The incoming Spanish, Irish and Greek governments, replacing the ones the electorates sacked, have to follow the same rules and live with the same loan terms as the government displaced.
One of the oddities is the electorates tend to blame their national government and politicians rather than the EU government and the Euro scheme. In part this is because the national governments are better known and easier to protest against. In part if is because the EU offers the struggling member states some money from its budgets, and claims that the national government is making the main calls when evidence suggests the main calls are now made at the centre.
Policies designed to protect and preserve the Euro are now producing deep and long lasting recessions in several Euro countries. As a result these countries have a growing deficit as employment falls, reducing tax revenues, and benefit bills rise. Individual countries cannot devalue to improve the competitiveness of their exports. They cannot themselves print more money to try and stimulate more activity. They are locked in to the austerity packages.
They are often attracted more to higher taxes than to lower spending. This can compound their difficulties. If they attack high income earners and profitable companeis too much they relocate elsewhere. Instead of raising the tax revenues, this lowers it by reducing the tax base. They also probably are encouraging more tax shy activity, with growing black economies.
We should expect more frustration with the austerity policies and the lack of progress in restoring growth. The extent of activity that is undertaken without paying tax or done through barter and other systems will act as some dilution to the anger.