For anyone tempted — as, evidently, Tony Abbott and Joe Hockey have been — to think that the financial problems of Europe are of little relevance to Australia, they should read today’s Reserve Bank Statement of Monetary Policy. The RBA says about its forecasts for the Australian economy:
“The largest risk to these forecasts is the sovereign debt and banking problems in the euro area … The Bank’s central scenario continues to be one in which the European authorities do enough to avert a disaster, but are not able to avoid periodic bouts of considerable uncertainty and volatility. A worse outcome in Europe would adversely affect the Australian economy, and underlying inflation would be likely to decline.”
Even without the bizarre events in Athens over the last four days, and regardless of the result of events in the Greek parliament over the next 48 hours, Europe’s economy is in deep trouble; more data overnight points to recession-like conditions across much of European industry. That is, even without a financial crisis flowing from what happens in Greece, many European countries will at best struggle to grow and may well slip into recession.
That’s the best case scenario for Europe currently. Other, far worse scenarios will emerge from the failure of the bailout deal agreed last week. And even if that deal holds, there are other threats, particularly from Italy.
The notion peddled by the opposition yesterday that, given the threat of another financial crisis of the kind that froze world markets in 2008, Australia should engage in economic isolationism and not increase its support for the IMF, is mystifying and dangerous. Julia Gillard, of course, lacks the clout her predecessor carried in the G20, but as a growing economy with a strong fiscal position and low debt compared to virtually every other developed country, Australia can play a constructive leadership role in ensuring the G20 does all it can to prevent a (further) European meltdown.
As the RBA makes clear, it is in Australia’s direct economic interests to do so. We can judge the Europeans severely for their many and varied faults of economic management, but for the sake of Australian jobs we can’t stand idly by while they drag the globe into recession.
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Absolutely agree with the views expressed in this editorial. What I find totally puzzling is that more Australians believe the opposition is better at running the economy than the current government, when it is simply not true. The power of the media (certain sections) to manipulate the masses perhaps?!!
CML – exactly. The unnerving thing is that all those sections of the media have to do is keep repeating “Gillard has made a mess of the country” and the ignorant believe it and keep repeating it back to each other.
Just how insane are the Opposition now? They don’t even make political sense as a dog-whistle – how many Australians of Greek decent have they now p***ed off?
Yet another example of fallacy trumping fact and the inability of this government to proclaim the good news, with ALL objective reality on its side.
Coz, there is the problem of that damned 70% fishwrapper control and tabloid TV domination of the ‘minds’ of the electorate.
Both Tony and Joe can’t help themselves to prove, once again, that they are beyond their level of incompetence.
Both should stay in the sand pit to continue practicing being spiteful and spoilt sports, a pre cursor to bulling (because the outcome, based on their thinking, is not to their liking) – two characteristics most childen learn early does not get them far in the playground.
But then to float to the surface, as (educated? Rhodes/lawyer) adults and alternative leaders of our nation to continue their childhood antics at the highest level in the public arena no less, is dispairing to say the least.
Which, of course, raises the more serious question – what does that say of those who actively or passively support their leadership?.
Ya gotta ask the perrenial question – What is one prepared to give up to get what one wants? – in this case it is POWER!
To give up power to do good, for power to delude one self and mislead others!
The pathway to success in this case is – school, religion, politics.
At least they serve as real live examples for one’s children of how not to be.
Unfortunately we are not formally taught how to use power nor are we taught to recognise abuse of power nor are we taught to whom we should surrender our precious power if we have to, eg the power we voters surrender in good faith to our elected representatives to do their best for all of us (I live in Abbottland, sigh).