Europe’s Debt Crisis: “Off With Their Heads” ?

Morris Segall     

This evening in London, angry student protesters attacked the Prince of Wales and his wife in their car as they were enroute to a theatre event. As the protesters pounded the Prince’s car several were reported to have shouted “off with their heads”. Off with their heads? Europe’s debt crisis and the resulting austerity programs are now spawning intensifying public outrage. Thank goodness this was 21st century London and not 18th century France. We have witnessed a series of public demonstrations, including riots and strikes from Greece to France and the U.K. However, the attack on Prince Charles and his wife signals a new, uglier and more dangerous public reaction to the draconian austerity measures adopted by Eurozone governments in their attempts to deleverage their national balance sheets.

Fortunately, Prince Charles and his wife were unhurt and were able to escape serious injury from the mob. The fact that this attack was in London on the heir to the British throne is historically unprecedented. The fact that the protesters were primarily students is also noteworthy. The students were protesting the huge increase in college tuition enacted by the British government as part of its harsh deficit reduction program. The increase in college tuition will put a college education out of reach for many students and thus doom their economic future. In addition to alienating a typically activist segment of the population, the result of denying advanced education to the next generation will condemn Britain and other countries adopting the same measure, to a future of economic decline. In our blog article of May 10, 2010, “From Panic to Relief”, we stated that “spending reduction programs will not be popular domestically and social unrest should be expected.”  We also commented in that article of the political costs of such social unrest. We will comment on these developments in more detail in a soon to be published article on the European debt crisis and its consequences on our website, www.spgtrend.com. However, tonight’s attack on the Prince of Wales raises the extent of the public backlash to a new, disquieting level and could be the beginning of an ugly winter of discontent in Europe that could result in serious political upheaval in the Eurozone with negative repercussions for the European Union.

Morris R. Segall