Guest post by CENAN PIRANI
Though the US has seemingly bounced back from the 2008 financial crisis, southern European countries like Portugal and Greece are currently dealing with debt situations that were once only characteristic of the “developing world”. In order to stabilize their economies after the 2008 crisis these European countries took on a series of IMF and European Central Bank loans in which rates of interest were higher than the countries’ rates of GDP growth, thus stagnating their economies for the foreseeable future.
This situation that currently befalls these countries’ economies was explained by Thomas Piketty in a recent interview he gave for the major Portuguese newspaper, PÚBLICO. Piketty, who has become a prominent public intellectual due to the popularity of his recent work, “Capital in the 21st Century”, was in Portugal this week in order to discuss the economic future of the country with some of its political figures. Besides outlining the problem, he discusses possible courses of action for the countries to release themselves from perpetual debt and austerity. These ideas ironically enough come out of the paths once carved by those now economically dominant countries in the Euro Zone, specifically France and Germany. Continue reading Piketty and the Economic Crisis in the Euro Zone: Cenan Pirani