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Austerity drives Europeans to extreme politics

Europeans are abandoning the mainstream political message of austerity and looking towards a more radical solution.

At the start of the crisis, an EU official warned that Germany would “squeeze until blood runs from the stones of the Acropolis” in return for German taxpayers’ money being used to bail out the spendthrift Greeks. His words were a disconcerting echo of the victorious allies’ push to “squeeze Germany until the pips squeak” after World War I.

The Treaty of Versailles demanded Germany pay the allies 269 billion marks, the equivalent of around $830 billion in today’s money. Germany’s struggle to pay undermined its economy, and the resultant humiliation and hardship aided Hitler’s rise to power.

Berlin’s current insistence on relentless economic belt-tightening despite the recession in Greece and other southern European countries is likened by some to the short-sighted approach of the allies in 1919.

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“If you push countries to a situation where they have no hope and no light at the end of the tunnel … people will turn to simplistic and sometimes downright nasty solutions,” Alistair Darling, Britain’s former finance minister said Wednesday. “The European (fiscal) treaty has the same foresight as the Treaty of Versailles where you institutionalize a downward spiral.”

Rather than Versailles, austerity opponents say the European Union should take its inspiration from the US approach to defeated Germany after World War II, and produce a Marshall Plan to revive the economies of its struggling southern members.