Posted on 04/26/2012 11:05:09 PM PDT by bruinbirdman
The Netherlands, France, and the ECB: Europe's growing opposition to Germany's strict austerity measures is threatening the survival of the fiscal pact. Nonetheless, Berlin should continue to insist on discipline both for itself and for Europe, argues a German business journalist.
Since when does the Netherlands lie on the shores of the Mediterranean? The euro crisis is back, and not just in the south. It has arrived on the northern shores too, which is where the good and the stable come together. Those who are like us.
Of course, the Netherlands is not Greece. The state however has gone into debt too quickly, and the private debt is immense. The government therefore has urged deeper cuts – and has been frustrated by the populists. Every case is different, though, from Madrid to Rome and now The Hague. The structure, still, is always the same: a stagnant economy and high unemployment leading to austerity cuts, which exact a price on economic vitality; the citizens get angry, the stock markets are rattled, and the politicians give way a little. Or – as in the Netherlands – sometimes they lose their offices too.
The United States has responded the same way as the opposition parties in Europe, accusing the Germans of ruining everything with their austerity. Berlin should rather take responsibility for its partners’ debts and free up money for new growth. Then calm would finally prevail in the shaky, much papered-over Euroland.
Such a solution would in truth suit the Americans, because as the world’s largest debtor they would then not be left standing so alone. But Europe is different from America. A bail-out in return for a little discipline has to be the deal here. Otherwise, one country after another will get sucked into the vortex of low ratings and high interest rates.
All eyes are on Germany now. But what is Berlin doing, except saving with great farsightedness in the midst of Germany’s economic boom? It’s planning new social services such as subsidised childcare and even coming up with pension increases into the bargain. No matter how one stands on the individual measures, the sums make Germany, whose debt amounts to approximately 80 percent of its current economic performance, less than credible as a role model in the European austerity pact.
Europe, though, needs Germany as the champion of austerity. The crisis will be returning to the front pages more frequently in any case. Governments here and there will be running up more debt than the common pact allows, and all this is part of the game. But if Berlin doesn’t push for savings and reforms, no one else will. In the end it would be even tougher to save the euro – and to make Europe converge.
All eyes are on Germany now. But what is Berlin doing, except saving with great farsightedness in the midst of Germany’s economic boom? It’s planning new social services such as subsidized childcare and even coming up with pension increases into the bargain. No matter how one stands on the individual measures, the sums make Germany, whose debt amounts to approximately 80 percent of its current economic performance, less than credible as a role model in the European austerity pact. …Don’t forget complete impunity vis-à-vis violating the sacred Stability and Growth Pact’s 3-percent-of-GDP debt ceiling (with them at 6 percent consistently). The social market economy does not work. The “austerity” doctrine here in particular is naked imperialism.
Austerity will be painful. This means you, too, Germany. And us (USA) also.
But failure to pursue austerity will lead to massively more pain and ultimately death as yes war. History proves this.
Austerity isn’t a choice.
If they were cutting spending and had no deficit as a result that would be one thing. But running huge deficits and launching new social programs cannot be called “strict austerity”
Germany is losing their partner in holding the EU countries to the weak austerity measures in place. Now that France seems hell bent on destruction by voting in another full blown Socialist, the EU is going to have no voice of reason other that of Germany and most of the failing states despise them and will disregard them. Thus, the EU is toast.
“The United States has responded the same way as the opposition parties in Europe, accusing the Germans of ruining everything with their austerity.”
We seem to be on the wrong side of everything these days.
:o(
Of course it is you right wing freak, we are all inherent to Dollars from heaven. That’s how we win;)
Since when is deleveraging “austerity?”
What “partner”? France was never a partner; it was an underling. They’ll be even more of an underling if Hollande gets in, because they’ll be next in line to have their economy go under.
Isn't that what I said?
Now that France seems hell bent on destruction by voting in another full blown Socialist,
Yes, but you also said that France was a “partner” at one time, when they were always an underling.
[…] that they themselves did not practice nor are practicing presently.The German deficit is at 1% of GDP. What are you talking about?
| Millions € | % GDP | |
|---|---|---|
| 2011 | -25,800.00 € | -1.00% |
| 2010 | -105,860.00 € | -4.30% |
| 2009 | -72,910.00 € | -3.00% |
| 2008 | 2,820.00 € | 0.10% |
| 2007 | 6,550.00 € | 0.30% |
The deficits in 2010 and 2009 were due to stupid stimulus programs. Note the surplus before that.
So, what are you complaining about? Do you think everybody should borrow and spend more than they do now? Somewhat like Britain, where the budget deficit is at -8.3% of GDP, down from -11.4% in 2009?
You’re not getting it. How did they achieve that without austerity and while keeping the social market economy? Missing narrative.
I am not a fan of the “social market economy” myself, and especially not of the insanely high taxes in Germany. But flatly denying their austerity efforts is just silly.
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