Despite their efforts to kick the can (bomb?) along the road for a while longer, the EU *will* face recession. Because all economies are now inextricably linked via credit, it will cause a 1930s style domino effect.
Solving debt with debt is profoundly stupid.
Bankers and traders are maximising their cash holdings so when assets deflate they can clean up for the next cycle.
The solution is to end parasitic capitalism which is the disproportionate rewarding of non-productive "utility" sectors of the economy at the expense of wealth producing sectors.
Abraham Lincoln said it well:
'The money power preys on the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes.'

The author needs to do some sums. Queensland boasts 30 billion tonnes of coal reserves but that coal is already being mined at near 300 million tonnes per year. Do the divison; with no further expansion of the coal export industry the reserves will be gone in 100 years. If we continue to burn coal what will civilisation use as a reducing agent to produce metals 100 years from now?
How will Australians live then with no coal or ore resources and no worthwhile manufacturing industry. Back to the sheeps back?
The principal economic problem today is the result of continuing to use the $US as the international trading currency for real goods and services. The USA has fought overseas wars and consumed the assets of other countries by doing no more than providing balances in USA banks (in effect printing money) for those countries and their businesses fulfilling the wishes of the USA Government and citizens.
Of course in some cases the actions of the suppliers has alleviated their domestic unemployment or other social pressures but the policy has also destroyed much of the manufacturing industry of the USA, except the armaments industry.
Some US banks and Wall Street speculators used the created bank balances to create the toxic derivatives and mortgage packages that led to the GFC. Until that situation is rectified the global problems will not go away.

'Indeed, there seems to be a consensus among most mainstream economists that a rise of protectionism may emerge if the global economy takes a turn for the worse.'

It may well indeed. And let's hope it does. Those who were around in the bad old days of protection can remember a wealth of cheap Australian products and jobs in Australian-owned industries. They remember a time when Australia was not a slave to international financial markets or global monopolies that swallowed up local industries and manipulated pricing.

The suppposed downside of protectionism did not adversely affect Australians - quite the contrary. Protectionism only disdvantaged those international corporations who were frustrated at not having unfettered access to the resources of every country in the world, and unfettered control of the international monetary system.

The anti-protection propaganda campaign of the 80s was HUGE - laced with thousands of media op eds predicting utter disaster if we didn't 'open our markets' to foreign competition (THE big anti-protection 80s buzz-word) and was bitterly fought against by those who knew what disasters it would bring - not only to Australia but the entire global sytsem.

Since then, none of the grandiose promises of de-regulation and globalisation have been fulfilled (e.g. that we would never again experience a boom, a bust or a recession, that everything would be cheaper, that industry would be more productive etc).

Economists may be scared stiff of a return of the P-word, but as far as I'm concerned, bring it on!! And while we're at it, self-sustainability would make for the perfect accompaniment.

*Those who were around in the bad old days of protection can remember a wealth of cheap Australian products and jobs in Australian-owned industries*

Yes, I can rememeber those times. More like a heap of mediocre,
overpriced products, with members of the Melbourne club growing
rich, based on their various monopolies. Consumers and efficient
exporters like farmers, were the ultimate losers, paying through
the nose all the way.

Thank goodness that Keating and others saw reason, or banana
republic was indeed the other option.

Following WWII growth was the mantra fuelled by cheap energy.

Since the early 1970's, growth, including globalisation has been fed by ever increasing levels of debt.

What has gone wrong?

I am sure the living history will conclude and a sliver of the story will inhabit some textbook. No witnesses will be around to fill in the details, much less point out the mistakes. Once that link is broken, I fear that even the most well-read of our progeny will find the economic catastrophe which began in the 1970's and really took off in 2008 nearly impossible to understand.

"They knew better."
"All the data was at their fingertips."
"It shouldn't have happened."
"Why?"

True, true, and true. As for "Why?" well, we're not done living through the why. We saw the breathtaking greed and mania that swelled into a Bubble for the Ages. And for nearly four years we've had to tolerate the ham-fisted, debt-by-the-$trillion policies of the governments supposedly in charge. The only thing worse than the juvenile arrogance of the politicians is the impotence of their "solutions."

The history-book version of all this, if it's remotely faithful to the events we're living through, will read as a Saga of Stupidity.

Forget globalisation and protectionism, growth is dying and is not going to return.

http://forum.onlineopinion.com.au/thread.asp?article=12670#2188

Ozandy, spot on, personally i dont know why anybody is worried about a Greek default, if Goldman Sucks, the 6 red signs family &/or any other international banksters went broke, the world would be a better place.

http://forum.onlineopinion.com.au/thread.asp?article=12670#218877

Foyle, also correct, BTW gold will be gone in 5 to 10 years at current rates of export.

http://forum.onlineopinion.com.au/thread.asp?article=12670#218878

Killarny, exactly.

http://forum.onlineopinion.com.au/thread.asp?article=12670#218910

Yabby, rubbish, those melbourne club rich now have 10 times more wealth than they used to have in the bad old days.

"repeat the lie, until it becomes the truth" V I Lenin.

Comrade Keating used the banana republic comment to hide the fact his policies were designed to "manufacture" it.

http://forum.onlineopinion.com.au/thread.asp?article=12670#218914

Geoff of Perth, the "why" is right here http://www.youtube.com/watch?v=gc5E6pvDv2Y&feature=channel_video_title enjoy, this is exactly how it happened, OH & this one http://www.mailstar.net/xTrots.html stage #3, or how to finish it all off is this ponzi scheme http://www.youtube.com/watch?v=ZgXeewXYbJU&feature=relmfu enjoy this one too.

*Yabby, rubbish, those melbourne club rich now have 10 times more wealth than they used to have in the bad old days.*

Formersnag, those rich had to find other ways to make their money,
rather then just lobby for higher tariffs and screw the consumer
even more. They now have competition, consumers have choices.

Just look at the howls of protest about internet shopping!

The consumer has never had it so good, which means all of us.

I plead guilty to ignorance of all things economic but I thought I did know what "immanent" meant, and I wonder whether the author meant "imminent".