Thanks for visiting this blog, created in July 2012 out of great concern for the fate of the €uro currency area, once again on the verge of collapse due to the economically ill-advised and heartless austerity policies imposed on Greece, Spain and other heavily-indebted €uro area countries by a christian democratic German chancellor impressed with the budgeting skills of Schwabian housewives. Meant to reduce the public debt and put the countries back on a path to economic growth, these macro-economically idiotic policies are doing anything but cause "pointless misery" as Paul Krugman so aptly describes it (Bloomberg, July 23-29, 2012).

Instead of reducing public debt, the austerity measures set in motion a vicious cycle of economic contraction, rising unemployment and poverty, lower tax revenues, private capital flight, and rising public debt shares as the economy declines faster than the public debt. What’s more, the austerity-driven ‘blood, sweat and tears’ policies recommended to the European periphery derive from the same economic doctrine that brought us to the brink of disaster in 2008. These policies are not only misanthropic and counterproductive to economic growth and debt reduction in Europe, but will prove explosive for the €uro currency area unless a drastic change of course takes place - and soon.

While I do not pretend to have ‘the’ solution for the €uro crisis, I would like to offer alternative economic perspectives and views on current events, and hope to chart a more humane path toward a balanced, socially fair, and sustainable economic future for the €uro area.

On the origins of the 2008 Great Financial Crisis:
“90+% of traders are men, and they bet all of our bank deposits on liar loans which froze credit leading to 40% average losses passed on to ordinary taxpayers; then begged for trillion-dollar bailouts upon which they paid themselves 50% higher boni.”


Sunday, August 25, 2013

Dear Fellow Eurozone Members: German Voters need your Help !

Germany’s current chancellor Angela Merkel used her power to influence important elections in your country. Why not return the favor ? By doing that, you could help your own austerity-damaged economies AND help German voters at the ballot box on September 22.  

Here is the problem: 
According to the latest polls (Emnid), Germany's voting populace is evenly split (45% vs. 45%) between the governing coalition of Merkel's CDU/CSU & FDP (liberal party) and the opposition combination of social democrats (SPD=25%), Greens (12%), and the left (Die Linke = 8%). Even when including the new party AfD (Alternative for Germany) on the conservative side and the pirates on the left (3 % each), we still have a stalemate. Furthermore, a large portion of the German voting population say that they might change their minds (72%) and the rest (roughly 30%) still does not know whom to vote for. 

Why not help German voters make up their minds ?
In fact, you should, as this national German election will largely determine future economic policymaking in the entire euro zone. As it stands now, the choices are not great: we will either remain stuck with Merkel, Schaeuble & the FDP, or a new Grand Coalition of Merkel & Steinbrueck, a combination that may improve economic policies only moderately, if at all. This is the base case scenario. The Merkel/Steinbrueck combination may even worsen economic policies as Steinbrueck, a staunch Agenda politician and a model cost- and deficit-cutter, may introduce Agenda 2020 with more cuts in wages and pensions in Germany and elsewhere in the eurozone, thus reinforcing the deflationary austerity and leading the eurozone into a depression. This, obviously, is the worst-case scenario. (see my posts "What do recent events mean for the EU and economic policymaking in the eurozone" and "A progressive alternative to Merkel's muddle-through government").

YOU, dear fellow eurozone member, could provide the jolt needed to lead Germany back to the right path, a path of true solidarity with its eurozone partners and economic policies that generate balanced, job-creating economic growth combined with a stable social safety net for the weakest members of society throughout the eurozone. 

How ?

Make yourself heard, by any means possible, and address social equity-loving Germans directly. Make sure they know that their tax money has not been used to help the citizens in Southern Europe but instead to bail out the banks and rich investors by transfering toxic and worthless assets from the private sector to the public sector, in other words: to YOU, the taxpayer. Make sure to let German voters know that this toxic asset transfer, combined with Merkel's austerity policies have INCREASED, not reduced, your country's debt load as the shrinking of your economies and, thus, the tax base also shrank tax revenues and economic growth. As a result, on top of a higher debt burden, your countries now have record unemployment and a lost generation of young people without any perspective to find a job.

Make sure German voters know about the economic and human misery chancellor Merkel's austerity policies has inflicted on your people, as the information about your people's suffering is largely withheld or smoothed over by Germany's mainstream press. Finally, make sure German voters realize that Merkel's social safety net-busting economic policies and their negative effects will NOT stop at Germany's borders but are planned to be extended throughout the eurozone with the help of the new Convergence and Competitiveness Instrument and the planned trans-atlantic trade and investment partnership TTIP.

May be, just may be, this will shake German voters so they'll finally wake up and smell the skunk Merkel's somniferous campaign wants to hide from them. The following videos from our Austrian euro partners may help as well (unfortunately only available in Austrian German, source: ORF):










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