I'm going to go ahead and link the entire paper here.
Now, it's 16 pages and I know that many of you lazy bastards won't read it, but I recommend that you do. It will give you amazing insight into how banks such as JP Morgan think and operate. I've tried to show you documents like this before, but this is a recent one.
For now I want to specifically focus on the section entitled "The Journey of National Political Reform". It starts on the bottom half of page 12.
At the start of the crisis, it was generally assumed that the national legacy problemswere economic in nature. But, as the crisis has evolved, it has become apparent thatthere are deep seated political problems in the periphery, which, in our view, need tochange if EMU is going to function properly in the long run.The political systems in the periphery were established in the aftermath ofdictatorship, and were defined by that experience. Constitutions tend to show astrong socialist influence, reflecting the political strength that left wing parties gainedafter the defeat of fascism. Political systems around the periphery typically displayseveral of the following features: weak executives; weak central states relative toregions; constitutional protection of labor rights; consensus building systems whichfoster political clientalism; and the right to protest if unwelcome changes are made tothe political status quo. The shortcomings of this political legacy have been revealedby the crisis. Countries around the periphery have only been partially successful inproducing fiscal and economic reform agendas, with governments constrained byconstitutions (Portugal), powerful regions (Spain), and the rise of populist parties(Italy and Greece).There is a growing recognition of the extent of this problem, both in the core and inthe periphery. Change is beginning to take place. Spain took steps to address some ofthe contradictions of the post-Franco settlement with last year’s legislation enablingcloser fiscal oversight of the regions. But, outside Spain little has happened thus far.The key test in the coming year will be in Italy, where the new government clearlyhas an opportunity to engage in meaningful political reform. But, in terms of the ideaof a journey, the process of political reform has barely begun.
Now I want you to take a look at this little section and tell me what you think the overall suggestion is here?
a little bit later it's suggested that a failure to reform the governments in the continent could have some precarious results. Of course these are prefaced as being "unlikely", but why even write these scenarios down if you deem them unlikely. Anyhow, here are the consequences of reform failure ie - failing to fall lockstep into authoritarianism
The other trigger of a shift to a new narrative would be if social dislocation in theEuro area were judged to have passed some form of tipping point. At present thisappears unlikely, but it is possible that reform fatigue could lead to i) the collapse ofseveral reform minded governments in the European south, ii) a collapse in supportfor the Euro or the EU, iii) an outright electoral victory for radical anti-Europeanparties somewhere in the region, or iv) the effective ungovernability of someMember States once social costs (particularly unemployment) pass a particular level.None of these developments look likely at the present time. But, the longer-termpicture (beyond the next 18 months) is hard to predict, and a more pronouncedbacklash to the current approach to crisis management cannot be excluded.
Now the majority of the first 10 pages deals primarily with banking ideology, and is equally fascinating (if you want to call it that) to read. I suggest a total read of the paper.