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FACTDROP: The Obama presidency remains firmly in denial over the euro crisis


The Obama presidency remains firmly in denial over the euro crisis

Hormats at the Senate Banking Committee hearing 

Πηγή: The Telegraph
By Nile Gardiner
Feb 17 2012

I’ve just read through the Congressional testimony delivered this week before the Senate Banking Committee by Robert D. Hormats, Under Secretary for Economic, Energy and Agricultural Affairs, on “Examining the European Debt Crisis and its Implications”. After reading it, one can only conclude that this is a US administration that refuses to publicly acknowledge the sheer scale of the huge debt crisis enveloping the eurozone. In fact there’s nothing at all in the testimony that even deals with the frightening reality on the ground across much of the EU. Incredibly, Greece is not even mentioned.

Hormats’ statement opens with the usual Obama administration fawningover the federalist vision of the European Project, and the drive for ever-closer union in Europe:

"America, since the days of Presidents Truman and Eisenhower, and Secretaries Marshall, Acheson and Dulles has recognized that a united and prosperous Europe is of enormous importance to the United States.

And we have recognized, since the days of Jean Monnet and Robert Schuman, that closer economic integration in Europe was an essential underpinning to a stronger Europe and its ability to be a robust ally. And we understood that a prosperous Europe was important to a prosperous America. That was true in the 1950s when we supported the Marshall Plan, and it is today".

It continues with a surreal discussion of the “economic recovery” supposedly being advanced by the EU:

"In addition to the steps the EU has taken to resolve the debt and banking crisis, which Under Secretary Brainard has just discussed, we also have seen a commitment, as evidenced by the results of the EU Summit on January 30, to address the current economic challenges not only through fiscal consolidation, but also by facilitating job creation and putting in place measures to assist member states in finding a path back to economic growth.

There is a lot more hard work ahead. And there are many difficult choices to make. But our European partners have laid a solid foundation on which to build, and we appreciate the enormous efforts the EU has taken to regain its economic footing".

Hormats’ colleague Lael Brainard, Under Secretary for International Affairs, also testified at the hearing. Brainard painted a misleading picture of a steadfast European response to the crisis, speaking of the EU’s actions in glowing terms:

The leaders of the euro area have pledged to do whatever it takes to stand behind the euro. And we have confidence the euro area has the capacity and the resources to stand behind that commitment. It is a common feature of financial crises that the pace of markets far outstrips that of political process. The challenge of delivering on European leaders’ commitment has been magnified by the considerable time that is required to secure agreement among 17 heads of state and permit deliberation and approval by 17 national parliaments. Despite these challenges, Europe has made enormous strides.

It is hard to see what strides exactly Europe is making in dealing with the biggest economic crisis on this side of the Atlantic since the Great Depression. What is missing from the Obama administration’s approach to the disaster unfolding in Europe is any acknowledgement of the real root causes of the deep-seated economic malaise – decades of socialist-style big government policies that have fuelled massive deficits and frightening levels of borrowing to pay for vast welfare states and unsustainable entitlement programs.

The European social model, coupled with the relentless drive to centralise economic and political power in Brussels and create an undemocratic European superstate, has combined to create a climate of pervasive economic decline. The Obama administration dare not speak the truth, not least because its own policies have closely mimicked the European experiment, that is now going down in flames. For this is a presidency firmly in denial over the spectacular failure of its own big government agenda, which is killing economic freedom, stifling prosperity, racking up massive public debts, and undermining liberty in the world’s only superpower.

The European Union offers a startling vision of America’s future if it continues down its current path, one that should be avoided at all costs.

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