14 May 10 Euro and New Politics

In my review of major trends to watch I talk about New Politics – in short the prospect of quite fundamental change in the political environment due largely to the toxic confluence of the end of consumerism and austerity.  If you want to explore this concept further Kagarlitsky[1] paints a succinct, but challenging, scenario. Broadly, the main points made are:

1. Greece’s loss of economic determination (when joining the Euro) eroded the power of the electorate. The electorate therefore feels distant from the true economic decision-makers.
2. Even if the current levels of unrest can be managed, with the prospect of more economic problems ahead, there is bound to be more social unease.
3. With other European economies in doubtful positions such social tension could spread.

Ultimately, the impact will be felt in the political arena. A trend to watch.

Reference
[1] Kagarlitsky, B. High Price of Losing Economic Sovereignty. The Moscow Times. May 14, 2010

Tags: euro, greece, political risk, scenario